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26 C.F.R. PART 1--INCOME TAXES

TITLE 26--Internal Revenue

CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY

SUBCHAPTER A--INCOME TAX

PART 1--INCOME TAXES

Table of Contents

Headings

�1.1001-1

Computation of gain or loss.

�1.1001-2

Discharge of liabilities.

�1.1001-3

Modifications of debt instruments.

�1.1001-4

Modifications of certain notional principal contracts.

�1.1001-5

European Monetary Union (conversion to the euro).

�1.1002-1

Sales or exchanges.

�1.1011-1

Adjusted basis.

�1.1011-2

Bargain sale to a charitable organization.

�1.1012-1

Basis of property.

�1.1012-2

Transfers in part a sale and in part a gift.

�1.1013-1

Property included in inventory.

�1.1014-1

Basis of property acquired from a decedent.

�1.1014-2

Property acquired from a decedent.

�1.1014-3

Other basis rules.

�1.1014-4

Uniformity of basis; adjustment to basis.

�1.1014-5

Gain or loss.

�1.1014-6

Special rule for adjustments to basis where property is acquired from a decedent prior to his death.

�1.1014-7

Example applying rules of 1.1014-4 through 1.1014-6 to case involving multiple interests.

�1.1014-8

Bequest, devise, or inheritance of a remainder interest.

�1.1014-9

Special rule with respect to DISC stock.

�1.1015-1

Basis of property acquired by gift after December 31, 1920.

�1.1015-2

Transfer of property in trust after December 31, 1920.

�1.1015-3

Gift or transfer in trust before January 1, 1921.

�1.1015-4

Transfers in part a gift and in part a sale.

�1.1015-5

Increased basis for gift tax paid.

�1.1016-1

Adjustments to basis; scope of section.

�1.1016-2

Items properly chargeable to capital account.

�1.1016-3

Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913.

�1.1016-3t

Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913 (temporary).

�1.1016-4

Exhaustion, wear and tear, obsolescence, amortization, and depletion; periods during which income was not subject to tax.

�1.1016-5

Miscellaneous adjustments to basis.

�1.1016-6

Other applicable rules.

�1.1016-10

Substituted basis.

�1.1017-1

Basis reductions following a discharge of indebtedness.

�1.1017-1t

Basis reductions following a discharge of indebtedness (temporary).

�1.1018-1

Adjusted basis; exception to section 270 of the Bankruptcy Act, as amended.

�1.1019-1

Property on which lessee has made improvements.

�1.1020-1

Election as to amounts allowed in respect of depreciation, etc., before 1952.

�1.1021-1

Sale of annuities.

�1.1031-0

Table of contents.

�1.1031(a)-1

Property held for productive use in trade or business or for investment.

�1.1031(a)-2

Additional rules for exchanges of personal property.

�1.1031(b)-1

Receipt of other property or money in tax-free exchange.

�1.1031(b)-2

Safe harbor for qualified intermediaries.

�1.1031(c)-1

Nonrecognition of loss.

�1.1031(d)-1

Property acquired upon a tax-free exchange.

�1.1031(d)-1t

Coordination of section 1060 with section 1031 (temporary).

�1.1031(d)-2

Treatment of assumption of liabilities.

�1.1031(e)-1

Exchange of livestock of different sexes.

�1.1031(j)-1

Exchanges of multiple properties.

�1.1031(k)-1

Treatment of deferred exchanges.

�1.1032-1

Disposition by a corporation of its own capital stock.

�1.1032-2

Disposition by a corporation of stock of a controlling corporation in certain triangular reorganizations.

�1.1032-3

Disposition of stock or stock options in certain transactions not qualifying under any other nonrecognition provision.

�1.1033(a)-1

Involuntary conversions; nonrecognition of gain.

�1.1033(a)-2

Involuntary conversion into similiar property, into money or into dissimilar property.

�1.1033(a)-3

Involuntary conversion of principal residence.

�1.1033(b)-1

Basis of property acquired as a result of an involuntary conversion.

�1.1033(c)-1

Disposition of excess property within irrigation project deemed to be involuntary conversion.

�1.1033(d)-1

Destruction or disposition of livestock because of disease.

�1.1033(e)-1

Sale or exchange of livestock solely on account of drought.

�1.1033(g)-1

Condemnation of real property held for productive use in trade or business or for investment.

�1.1033(h)-1

Effective date.

�1.1034-1

Sale or exchange of residence.

�1.1035-1

Certain exchanges of insurance policies.

�1.1036-1

Stock for stock of the same corporation.

�1.1037-1

Certain exchanges of United States obligations.

�1.1038-1

Reacquisitions of real property in satisfaction of indebtedness.

�1.1038-2

Reacquisition and resale of property used as a principal residence.

�1.1038-3

Election to have section 1038 apply for taxable years beginning after December 31, 1957.

�1.1039-1

Certain sales of low-income housing projects.

�1.1041-1t

Treatment of transfer of property between spouses or incident to divorce (temporary).

�1.1041-2

Redemptions of stock.

�1.1042-1t

Questions and answers relating to the sales of stock to employee stock ownership plans or certain cooperatives (temporary).

�1.1044(a)-1

Time and manner for making election under the Omnibus Budget Reconciliation Act of 1993.

�1.1051-1

Basis of property acquired during affiliation.

�1.1052-1

Basis of property established by Revenue Act of 1932.

�1.1052-2

Basis of property established by Revenue Act of 1934.

�1.1052-3

Basis of property established by the Internal Revenue Code of 1939.

�1.1053-1

Property acquired before March 1, 1913.

�1.1054-1

Certain stock of Federal National Mortgage Association.

�1.1055-1

General rule with respect to redeemable ground rents.

�1.1055-2

Determination of amount realized on the transfer of the right to hold real property subject to liabilities under a redeemable ground rent.

�1.1055-3

Basis of real property held subject to liabilities under a redeemable ground rent.

�1.1055-4

Basis of redeemable ground rent reserved or created in connection with transfers of real property before April 11, 1963.

�1.1059(e)-1

Non-pro rata redemptions.

�1.1059a-1

Limitation on taxpayer's basis or inventory cost in property imported from related persons.

�1.1060-1

Special allocation rules for certain asset acquisitions.

�1.1060-1t

Special allocation rules for certain asset acquisitions (temporary).

�1.1071-1

Gain from sale or exchange to effectuate policies of Federal Communications Commission.

�1.1071-2

Nature and effect of election.

�1.1071-3

Reduction of basis of property pursuant to election under section 1071.

�1.1071-4

Manner of election.

�1.1081-1

Terms used.

�1.1081-2

Purpose and scope of exception.

�1.1081-3

Exchanges of stock or securities solely for stock or securities.

�1.1081-4

Exchanges of property for property by corporations.

�1.1081-5

Distribution solely of stock or securities.

�1.1081-6

Transfers within system group.

�1.1081-7

Sale of stock or securities received upon exchange by members of system group.

�1.1081-8

Exchanges in which money or other nonexempt property is received.

�1.1081-9

Requirements with respect to order of Securities and Exchange Commission.

�1.1081-10

Nonapplication of other provisions of the Internal Revenue Code of 1954.

�1.1081-11t

Records to be kept and information to be filed with returns (temporary).

�1.1082-1

Basis for determining gain or loss.

�1.1082-2

Basis of property acquired upon exchanges under section 1081 (a) or (e).

�1.1082-3

Reduction of basis of property by reason of gain not recognized under section 1081(b).

�1.1082-4

Basis of property acquired by corporation under section 1081(a), 1081(b), or 1081(e) as contribution of capital or surplus, or in consideration for its own stock or securities.

�1.1082-5

Basis of property acquired by shareholder upon tax-free distribution under section 1081(c) (1) or (2).

�1.1082-6

Basis of property acquired under section 1081(d) in transactions between corporations of the same system group.

�1.1083-1

Definitions.

�1.1091-1

Losses from wash sales of stock or securities.

�1.1091-2

Basis of stock or securities acquired in ''wash sales''.

�1.1092(b)-1t

Coordination of loss deferral rules and wash sale rules (temporary).

�1.1092(b)-2t

Treatment of holding periods and losses with respect to straddle positions (temporary).

�1.1092(b)-3t

Mixed straddles; straddle-by-straddle identification under section 1092(b)(2)(A)(i)(I) (temporary).

�1.1092(b)-4t

Mixed straddles; mixed straddle account (temporary).

�1.1092(b)-5t

Definitions (temporary).

�1.1092(c)-1

Qualified covered calls.

�1.1092(c)-2

Equity options with flexible terms.

�1.1092(c)-3

Qualifying over-the-counter options.

�1.1092(c)-4

Definitions.

�1.1092(d)-1

Definitions and special rules.

�1.1092(d)-2

Personal property.

�1.1201-1

Alternative tax.

�1.1202-0

Table of contents.

�1.1202-1

Deduction for capital gains.

�1.1202-2

Qualified small business stock; effect of redemptions.

�1.1211-1

Limitation on capital losses.

�1.1212-1

Capital loss carryovers and carrybacks.

�1.1221-1

Meaning of terms.

�1.1221-2

Hedging transactions.

�1.1221-2t

Hedging transactions (temporary).

�1.1222-1

Other terms relating to capital gains and losses.

�1.1223-1

Determination of period for which capital assets are held.

�1.1223-3

Rules relating to the holding periods of partnership interests.

�1.1231-1

Gains and losses from the sale or exchange of certain property used in the trade or business.

�1.1231-2

Livestock held for draft, breeding, dairy, or sporting purposes.

�1.1232-1

Bonds and other evidences of indebtedness; scope of section.

�1.1232-2

Retirement.

�1.1232-3

Gain upon sale or exchange of obligations issued at a discount after December 31, 1954.

�1.1232-3a

Inclusion as interest of original issue discount on certain obligations issued after May 27, 1969.

�1.1232-4

Obligations with excess coupons detached.

�1.1233-1

Gains and losses from short sales.

�1.1233-2

Hedging transactions.

�1.1234-1

Options to buy or sell.

�1.1234-2

Special rule for grantors of straddles applicable to certain options granted on or before September 1, 1976.

�1.1234-3

Special rules for the treatment of grantors of certain options granted after September 1, 1976.

�1.1234-4

Hedging transactions.

�1.1235-1

Sale or exchange of patents.

�1.1235-2

Definition of terms.

�1.1236-1

Dealers in securities.

�1.1237-1

Real property subdivided for sale.

�1.1238-1

Amortization in excess of depreciation.

�1.1239-1

Gain from sale or exchange of depreciable property between certain related taxpayers after October 4, 1976.

�1.1239-2

Gain from sale or exchange of depreciable property between certain related taxpayers on or before October 4, 1976.

�1.1240-1

Capital gains treatment of certain termination payments.

�1.1241-1

Cancellation of lease or distributor's agreement.

�1.1242-1

Losses on small business investment company stock.

�1.1243-1

Loss of small business investment company.

�1.1244(a)-1

Loss on small business stock treated as ordinary loss.

�1.1244(b)-1

Annual limitation.

�1.1244(c)-1

Section 1244 stock defined.

�1.1244(c)-2

Small business corporation defined.

�1.1244(d)-1

Contributions of property having basis in excess of value.

�1.1244(d)-2

Increases in basis of section 1244 stock.

�1.1244(d)-3

Stock dividend, recapitalizations, changes in name, etc.

�1.1244(d)-4

Net operating loss deduction.

�1.1244(e)-1

Records to be kept.

�1.1245-1

General rule for treatment of gain from dispositions of certain depreciable property.

�1.1245-2

Definition of recomputed basis.

�1.1245-3

Definition of section 1245 property.

�1.1245-4

Exceptions and limitations.

�1.1245-5

Adjustments to basis.

�1.1245-6

Relation of section 1245 to other sections.

�1.1247-1

Election by foreign investment companies to distribute income currently.

�1.1247-2

Computation and distribution of taxable income.

�1.1247-3

Treatment of capital gains.

�1.1247-4

Election by foreign investment company with respect to foreign tax credit.

�1.1247-5

Information and recordkeeping requirements.

�1.1248-1

Treatment of gain from certain sales or exchanges of stock in certain foreign corporations.

�1.1248-2

Earnings and profits attributable to a block of stock in simple cases.

�1.1248-3

Earnings and profits attributable to stock in complex cases.

�1.1248-4

Limitation on tax applicable to individuals.

�1.1248-5

Stock ownership requirements for less developed country corporations.

�1.1248-6

Sale or exchange of stock in certain domestic corporations.

�1.1248-7

Taxpayer to establish earnings and profits and foreign taxes.

�1.1249-1

Gain from certain sales or exchanges of patents, etc., to foreign corporations.

�1.1250-1

Gain from dispositions of certain depreciable realty.

�1.1250-2

Additional depreciation defined.

�1.1250-3

Exceptions and limitations.

�1.1250-4

Holding period.

�1.1250-5

Property with two or more elements.

�1.1251-1

General rule for treatment of gain from disposition of property used in farming where farm losses offset nonfarm income.

�1.1251-2

Excess deductions account.

�1.1251-3

Definitions relating to section 1251.

�1.1251-4

Exceptions and limitations.

�1.1252-1

General rule for treatment of gain from disposition of farm land.

�1.1252-2

Special rules.

�1.1254-0

Table of contents for section 1254 recapture rules.

�1.1254-1

Treatment of gain from disposition of natural resource recapture property.

�1.1254-2

Exceptions and limitations.

�1.1254-3

Section 1254 costs immediately after certain acquisitions.

�1.1254-4

Special rules for S corporations and their shareholders.

�1.1254-5

Special rules for partnerships and their partners.

�1.1254-6

Effective date of regulations.

�1.1256(e)-1

Identification of hedging transactions.

�1.1258-1

Netting rule for certain conversion transactions.

�1.1271-0

Original issue discount; effective date; table of contents.

�1.1271-1

Special rules applicable to amounts received on retirement, sale, or exchange of debt instruments.

�1.1272-1

Current inclusion of OID in income.

�1.1272-2

Treatment of debt instruments purchased at a premium.

�1.1272-3

Election by a holder to treat all interest on a debt instrument as OID.

�1.1273-1

Definition of OID.

�1.1273-2

Determination of issue price and issue date.

�1.1274-1

Debt instruments to which section 1274 applies.

�1.1274-2

Issue price of debt instruments to which section 1274 applies.

�1.1274-3

Potentially abusive situations defined.

�1.1274-4

Test rate.

�1.1274-5

Assumptions.

�1.1274a-1

Special rules for certain transactions where stated principal amount does not exceed $2,800,000.

�1.1275-1

Definitions.

�1.1275-2

Special rules relating to debt instruments.

�1.1275-3

OID information reporting requirements.

�1.1275-4

Contingent payment debt instruments.

�1.1275-5

Variable rate debt instruments.

�1.1275-6

Integration of qualifying debt instruments.

�1.1275-7

Inflation-indexed debt instruments.

�1.1286-1

Tax treatment of certain stripped bonds and stripped coupons.

�1.1286-2

Stripped inflation-indexed debt instruments.

�1.1287-1

Denial of capital gains treatment for gains on registration-required obligations not in registered form.

�1.1291-0

Treatment of shareholders of certain passive foreign investment companies; table of contents.

�1.1291-1

Taxation of U.S. persons that are shareholders of PFICs that are not pedigreed QEFs.

�1.1291-9

Deemed dividend election.

�1.1291-9t

Deemed dividend election (temporary).

�1.1291-10

Deemed sale election.

�1.1293-0

Table of contents.

�1.1293-1

Current taxation of income from qualified electing funds.

�1.1294-0

Table of contents.

�1.1294-1t

Election to extend the time for payment of tax on undistributed earnings of a qualified electing fund (temporary).

�1.1295-0

Table of contents.

�1.1295-1

Qualified electing funds.

�1.1295-3

Retroactive elections.

�1.1296-1

Mark to market election for marketable stock.

�1.1296-2

Definition of marketable stock.

�1.1297-0

Table of contents.

�1.1297-3

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC.--[Reserved]

�1.1297-0t

Table of contents (temporary).

�1.1297-3t

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC (temporary).

�1.1297-3

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC.

�1.1297-3t

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC (temporary).

�1.1298-0

Table of contents.

�1.1298-3

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC.

�1.1298-0t

Table of contents (temporary).

�1.1298-3t

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC (temporary).

�1.1298-3

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC.

�1.1298-3t

Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC (temporary).

�1.1301-1

Averaging of farm income.

�1.1311(a)-1

Introduction.

�1.1311(a)-2

Purpose and scope of section 1311.

�1.1311(b)-1

Maintenance of an inconsistent position.

�1.1311(b)-2

Correction not barred at time of erroneous action.

�1.1311(b)-3

Existence of relationship in case of adjustment by way of deficiency assessment.

�1.1312-1

Double inclusion of an item of gross income.

�1.1312-2

Double allowance of a deduction or credit.

�1.1312-3

Double exclusion of an item of gross income.

�1.1312-4

Double disallowance of a deduction or credit.

�1.1312-5

Correlative deductions and inclusions for trusts or estates and legatees, beneficiaries, or heirs.

�1.1312-6

Correlative deductions and credits for certain related corporations.

�1.1312-7

Basis of property after erroneous treatment of a prior transaction.

�1.1312-8

Law applicable in determination of error.

�1.1313(a)-1

Decision by Tax Court or other court as a determination.

�1.1313(a)-2

Closing agreement as a determination.

�1.1313(a)-3

Final disposition of claim for refund as a determination.

�1.1313(a)-4

Agreement pursuant to section 1313(a)(4) as a determination.

�1.1313(c)-1

Related taxpayer.

�1.1314(a)-1

Ascertainment of amount of adjustment in year of error.

�1.1314(a)-2

Adjustment to other barred taxable years.

�1.1314(b)-1

Method of adjustment.

�1.1314(c)-1

Adjustment unaffected by other items.

�1.1321-1

Involuntary liquidation of lifo inventories.

�1.1321-2

Liquidation and replacement of lifo inventories by acquiring corporations.

�1.1331-1

Recoveries in respect of war losses.

�1.1332-1

Inclusion in gross income of war loss recoveries.

�1.1333-1

Tax adjustment measured by prior benefits.

�1.1334-1

Restoration of value of investments.

�1.1335-1

Elective method; time and manner of making election and effect thereof.

�1.1336-1

Basis of recovered property.

�1.1337-1

Determination of tax benefits from allowable deductions.

�1.1341-1

Restoration of amounts received or accrued under claim of right.

�1.1342-1

Computation of tax where taxpayer recovers substantial amount held by another under claim of right; effective date.

�1.1346-1

Recovery of unconstitutional taxes.

�1.1347-1

Tax on certain amounts received from the United States.

�1.1348-1

Fifty-percent maximum tax on earned income.

�1.1348-2

Computation of the fifty-percent maximum tax on earned income.

�1.1348-3

Definitions.

�1.1361-0

Table of contents.

�1.1361-1

S corporation defined.

�1.1361-2

Definitions relating to S corporation subsidiaries.

�1.1361-3

QSub election.

�1.1361-4

Effect of QSub election.

�1.1361-5

Termination of QSub election.

�1.1361-6

Effective date.

�1.1362-0

Table of contents.

�1.1362-1

Election to be an S corporation.

�1.1362-2

Termination of election.

�1.1362-3

Treatment of S termination year.

�1.1362-4

Inadvertent terminations.

�1.1362-5

Election after termination.

�1.1362-6

Elections and consents.

�1.1362-7

Effective dates.

�1.1362-8

Dividends received from affiliated subsidiaries.

�1.1363-1

Effect of election on corporation.

�1.1363-2

Recapture of LIFO benefits.

�1.1366-0

Table of contents.

�1.1366-1

Shareholder's share of items of an S corporation.

�1.1366-2

Limitations on deduction of passthrough items of an S corporation to its shareholders.

�1.1366-3

Treatment of family groups.

�1.1366-4

Special rules limiting the passthrough of certain items of an S corporation to its shareholders.

�1.1366-5

Effective date.

�1.1367-0

Table of contents.

�1.1367-1

Adjustments to basis of shareholder's stock in an S corporation.

�1.1367-2

Adjustments to basis of indebtedness to shareholder.

�1.1367-3

Effective date and transition rule.

�1.1368-0

Table of contents.

�1.1368-1

Distributions by S corporations.

�1.1368-1t

Distributions by S corporations (temporary).

�1.1368-2

Accumulated adjustments account (AAA).

�1.1368-3

Examples.

�1.1368-4

Effective date and transition rule.

�1.1374-0

Table of contents.

�1.1374-1

General rules and definitions.

�1.1374-2

Net recognized built-in gain.

�1.1374-3

Net unrealized built-in gain.

�1.1374-4

Recognized built-in gain or loss.

�1.1374-5

Loss carryforwards.

�1.1374-6

Credits and credit carryforwards.

�1.1374-7

Inventory.

�1.1374-8

Section 1374(d)(8) transactions.

�1.1374-9

Anti-stuffing rule.

�1.1374-10

Effective date and additional rules.

�1.1375-1

Tax imposed when passive investment income of corporation having subchapter C earnings and profits exceed 25 percent of gross receipts.

�1.1377-0

Table of contents.

�1.1377-1

Pro rata share.

�1.1377-1t

Pro rata share (temporary).

�1.1377-2

Post-termination transition period.

�1.1377-3

Effective dates.

�1.1378-1

Taxable year of S corporation.

�1.1374-1a

Tax imposed on certain capital gains.

�1.1381-1

Organizations to which part applies.

�1.1381-2

Tax on certain farmers' cooperatives.

�1.1382-1

Taxable income of cooperatives; gross income.

�1.1382-2

Taxable income of cooperatives; treatment of patronage dividends.

�1.1382-3

Taxable income of cooperatives; special deductions for exempt farmers' cooperatives.

�1.1382-4

Taxable income of cooperatives; payment period for each taxable year.

�1.1382-5

Taxable income of cooperatives; products marketed under pooling arrangements.

�1.1382-6

Taxable income of cooperatives; treatment of earnings received after patronage occurred.

�1.1382-7

Special rules applicable to cooperative associations exempt from tax before January 1, 1952.

�1.1383-1

Computation of tax where cooperative redeems nonqualified written notices of allocation.

�1.1385-1

Amounts includible in patron's gross income.

�1.1388-1

Definitions and special rules.

�1.1394-0

Table of contents.

�1.1394-1

Enterprise zone facility bonds.

�1.1396-1

Qualified zone employees.

�1.1397e-1

Qualified zone academy bonds.

�1.1398-1

Treatment of passive activity losses and passive activity credits in individuals' title 11 cases.

�1.1398-2

Treatment of section 465 losses in individuals' title 11 cases.

�1.1398-3

Treatment of section 121 exclusion in individuals' title 11 cases.

�1.1400l(b)-1t

Additional first year depreciation deduction for qualified New York Liberty Zone property (temporary).