
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1033]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
          Subchapter O--Gain or Loss on Disposition of Property
 
                  PART III--COMMON NONTAXABLE EXCHANGES
 
Sec. 1033. Involuntary conversions


(a) General rule

    If property (as a result of its destruction in whole or in part, 
theft, seizure, or requisition or condemnation or threat or imminence 
thereof) is compulsorily or involuntarily converted--

                (1) Conversion into similar property

        Into property similar or related in service or use to the 
    property so converted, no gain shall be recognized.

                      (2) Conversion into money

        Into money or into property not similar or related in service or 
    use to the converted property, the gain (if any) shall be recognized 
    except to the extent hereinafter provided in this paragraph:

        (A) Nonrecognition of gain

            If the taxpayer during the period specified in subparagraph 
        (B), for the purpose of replacing the property so converted, 
        purchases other property similar or related in service or use to 
        the property so converted, or purchases stock in the acquisition 
        of control of a corporation owning such other property, at the 
        election of the taxpayer the gain shall be recognized only to 
        the extent that the amount realized upon such conversion 
        (regardless of whether such amount is received in one or more 
        taxable years) exceeds the cost of such other property or such 
        stock. Such election shall be made at such time and in such 
        manner as the Secretary may by regulations prescribe. For 
        purposes of this paragraph--
                (i) no property or stock acquired before the disposition 
            of the converted property shall be considered to have been 
            acquired for the purpose of replacing such converted 
            property unless held by the taxpayer on the date of such 
            disposition; and
                (ii) the taxpayer shall be considered to have purchased 
            property or stock only if, but for the provisions of 
            subsection (b) of this section, the unadjusted basis of such 
            property or stock would be its cost within the meaning of 
            section 1012.

        (B) Period within which property must be replaced

            The period referred to in subparagraph (A) shall be the 
        period beginning with the date of the disposition of the 
        converted property, or the earliest date of the threat or 
        imminence of requisition or condemnation of the converted 
        property, whichever is the earlier, and ending--
                (i) 2 years after the close of the first taxable year in 
            which any part of the gain upon the conversion is realized, 
            or
                (ii) subject to such terms and conditions as may be 
            specified by the Secretary, at the close of such later date 
            as the Secretary may designate on application by the 
            taxpayer. Such application shall be made at such time and in 
            such manner as the Secretary may by regulations prescribe.

        (C) Time for assessment of deficiency attributable to gain upon 
                conversion

            If a taxpayer has made the election provided in subparagraph 
        (A), then--
                (i) the statutory period for the assessment of any 
            deficiency, for any taxable year in which any part of the 
            gain on such conversion is realized, attributable to such 
            gain shall not expire prior to the expiration of 3 years 
            from the date the Secretary is notified by the taxpayer (in 
            such manner as the Secretary may by regulations prescribe) 
            of the replacement of the converted property or of an 
            intention not to replace, and
                (ii) such deficiency may be assessed before the 
            expiration of such 3-year period notwithstanding the 
            provisions of section 6212(c) or the provisions of any other 
            law or rule of law which would otherwise prevent such 
            assessment.

        (D) Time for assessment of other deficiencies attributable to 
                election

            If the election provided in subparagraph (A) is made by the 
        taxpayer and such other property or such stock was purchased 
        before the beginning of the last taxable year in which any part 
        of the gain upon such conversion is realized, any deficiency, to 
        the extent resulting from such election, for any taxable year 
        ending before such last taxable year may be assessed 
        (notwithstanding the provisions of section 6212(c) or 6501 or 
        the provisions of any other law or rule of law which would 
        otherwise prevent such assessment) at any time before the 
        expiration of the period within which a deficiency for such last 
        taxable year may be assessed.

        (E) Definitions

            For purposes of this paragraph--
            (i) Control

                The term ``control'' means the ownership of stock 
            possessing at least 80 percent of the total combined voting 
            power of all classes of stock entitled to vote and at least 
            80 percent of the total number of shares of all other 
            classes of stock of the corporation.
            (ii) Disposition of the converted property

                The term ``disposition of the converted property'' means 
            the destruction, theft, seizure, requisition, or 
            condemnation of the converted property, or the sale or 
            exchange of such property under threat or imminence of 
            requisition or condemnation.

(b) Basis of property acquired through involuntary conversion

           (1) Conversions described in subsection (a)(1)

        If the property was acquired as the result of a compulsory or 
    involuntary conversion described in subsection (a)(1), the basis 
    shall be the same as in the case of the property so converted--
            (A) decreased in the amount of any money received by the 
        taxpayer which was not expended in accordance with the 
        provisions of law (applicable to the year in which such 
        conversion was made) determining the taxable status of the gain 
        or loss upon such conversion, and
            (B) increased in the amount of gain or decreased in the 
        amount of loss to the taxpayer recognized upon such conversion 
        under the law applicable to the year in which such conversion 
        was made.

           (2) Conversions described in subsection (a)(2)

        In the case of property purchased by the taxpayer in a 
    transaction described in subsection (a)(2) which resulted in the 
    nonrecognition of any part of the gain realized as the result of a 
    compulsory or involuntary conversion, the basis shall be the cost of 
    such property decreased in the amount of the gain not so recognized; 
    and if the property purchased consists of more than 1 piece of 
    property, the basis determined under this sentence shall be 
    allocated to the purchased properties in proportion to their 
    respective costs.

       (3) Property held by corporation the stock of which is 
                            replacement property

        (A) In general

            If the basis of stock in a corporation is decreased under 
        paragraph (2), an amount equal to such decrease shall also be 
        applied to reduce the basis of property held by the corporation 
        at the time the taxpayer acquired control (as defined in 
        subsection (a)(2)(E)) of such corporation.

        (B) Limitation

            Subparagraph (A) shall not apply to the extent that it would 
        (but for this subparagraph) require a reduction in the aggregate 
        adjusted bases of the property of the corporation below the 
        taxpayer's adjusted basis of the stock in the corporation 
        (determined immediately after such basis is decreased under 
        paragraph (2)).

        (C) Allocation of basis reduction

            The decrease required under subparagraph (A) shall be 
        allocated--
                (i) first to property which is similar or related in 
            service or use to the converted property,
                (ii) second to depreciable property (as defined in 
            section 1017(b)(3)(B)) not described in clause (i), and
                (iii) then to other property.

        (D) Special rules

            (i) Reduction not to exceed adjusted basis of 
                    property

                No reduction in the basis of any property under this 
            paragraph shall exceed the adjusted basis of such property 
            (determined without regard to such reduction).
            (ii) Allocation of reduction among properties

                If more than 1 property is described in a clause of 
            subparagraph (C), the reduction under this paragraph shall 
            be allocated among such property in proportion to the 
            adjusted bases of such property (as so determined).

(c) Property sold pursuant to reclamation laws

    For purposes of this subtitle, if property lying within an 
irrigation project is sold or otherwise disposed of in order to conform 
to the acreage limitation provisions of Federal reclamation laws, such 
sale or disposition shall be treated as an involuntary conversion to 
which this section applies.

(d) Livestock destroyed by disease

    For purposes of this subtitle, if livestock are destroyed by or on 
account of disease, or are sold or exchanged because of disease, such 
destruction or such sale or exchange shall be treated as an involuntary 
conversion to which this section applies.

(e) Livestock sold on account of drought, flood, or other weather-
        related conditions

    For purposes of this subtitle, the sale or exchange of livestock 
(other than poultry) held by a taxpayer for draft, breeding, or dairy 
purposes in excess of the number the taxpayer would sell if he followed 
his usual business practices shall be treated as an involuntary 
conversion to which this section applies if such livestock are sold or 
exchanged by the taxpayer solely on account of drought, flood, or other 
weather-related conditions.

(f) Replacement of livestock with other farm property where there has 
        been environmental contamination

    For purposes of subsection (a), if, because of soil contamination or 
other environmental contamination, it is not feasible for the taxpayer 
to reinvest the proceeds from compulsorily or involuntarily converted 
livestock in property similar or related in use to the livestock so 
converted, other property (including real property) used for farming 
purposes shall be treated as property similar or related in service or 
use to the livestock so converted.

(g) Condemnation of real property held for productive use in trade or 
        business or for investment

                          (1) Special rule

        For purposes of subsection (a), if real property (not including 
    stock in trade or other property held primarily for sale) held for 
    productive use in trade or business or for investment is (as the 
    result of its seizure, requisition, or condemnation, or threat or 
    imminence thereof) compulsorily or involuntarily converted, property 
    of a like kind to be held either for productive use in trade or 
    business or for investment shall be treated as property similar or 
    related in service or use to the property so converted.

                           (2) Limitations

        Paragraph (1) shall not apply to the purchase of stock in the 
    acquisition of control of a corporation described in subsection 
    (a)(2)(A).

     (3) Election to treat outdoor advertising displays as real 
                                  property

        (A) In general

            A taxpayer may elect, at such time and in such manner as the 
        Secretary may prescribe, to treat property which constitutes an 
        outdoor advertising display as real property for purposes of 
        this chapter. The election provided by this subparagraph may not 
        be made with respect to any property with respect to which an 
        election under section 179(a) (relating to election to expense 
        certain depreciable business assets) is in effect.

        (B) Election

            An election made under subparagraph (A) may not be revoked 
        without the consent of the Secretary.

        (C) Outdoor advertising display

            For purposes of this paragraph, the term ``outdoor 
        advertising display'' means a rigidly assembled sign, display, 
        or device permanently affixed to the ground or permanently 
        attached to a building or other inherently permanent structure 
        constituting, or used for the display of, a commercial or other 
        advertisement to the public.

        (D) Character of replacement property

            For purposes of this subsection, an interest in real 
        property purchased as replacement property for a compulsorily or 
        involuntarily converted outdoor advertising display defined in 
        subparagraph (C) (and treated by the taxpayer as real property) 
        shall be considered property of a like kind as the property 
        converted without regard to whether the taxpayer's interest in 
        the replacement property is the same kind of interest the 
        taxpayer held in the converted property.

                          (4) Special rule

        In the case of a compulsory or involuntary conversion described 
    in paragraph (1), subsection (a)(2)(B)(i) shall be applied by 
    substituting ``3 years'' for ``2 years''.

(h) Special rules for property damaged by Presidentially declared 
        disasters

                      (1) Principal residences

        If the taxpayer's principal residence or any of its contents is 
    compulsorily or involuntarily converted as a result of a 
    Presidentially declared disaster--

        (A) Treatment of insurance proceeds

            (i) Exclusion for unscheduled personal property

                No gain shall be recognized by reason of the receipt of 
            any insurance proceeds for personal property which was part 
            of such contents and which was not scheduled property for 
            purposes of such insurance.
            (ii) Other proceeds treated as common fund

                In the case of any insurance proceeds (not described in 
            clause (i)) for such residence or contents--
                    (I) such proceeds shall be treated as received for 
                the conversion of a single item of property, and
                    (II) any property which is similar or related in 
                service or use to the residence so converted (or 
                contents thereof) shall be treated for purposes of 
                subsection (a)(2) as property similar or related in 
                service or use to such single item of property.

        (B) Extension of replacement period

            Subsection (a)(2)(B) shall be applied with respect to any 
        property so converted by substituting ``4 years'' for ``2 
        years''.

            (2) Trade or business and investment property

        If a taxpayer's property held for productive use in a trade or 
    business or for investment is compulsorily or involuntarily 
    converted as a result of a Presidentially declared disaster, 
    tangible property of a type held for productive use in a trade or 
    business shall be treated for purposes of subsection (a) as property 
    similar or related in service or use to the property so converted.

                (3) Presidentially declared disaster

        For purposes of this subsection, the term ``Presidentially 
    declared disaster'' means any disaster which, with respect to the 
    area in which the property is located, resulted in a subsequent 
    determination by the President that such area warrants assistance by 
    the Federal Government under the Disaster Relief and Emergency 
    Assistance Act.

                       (4) Principal residence

        For purposes of this subsection, the term ``principal 
    residence'' has the same meaning as when used in section 121, except 
    that such term shall include a residence not treated as a principal 
    residence solely because the taxpayer does not own the residence.

(i) Replacement property must be acquired from unrelated person in 
        certain cases

                           (1) In general

        If the property which is involuntarily converted is held by a 
    taxpayer to which this subsection applies, subsection (a) shall not 
    apply if the replacement property or stock is acquired from a 
    related person. The preceding sentence shall not apply to the extent 
    that the related person acquired the replacement property or stock 
    from an unrelated person during the period applicable under 
    subsection (a)(2)(B).

              (2) Taxpayers to which subsection applies

        This subsection shall apply to--
            (A) a C corporation,
            (B) a partnership in which 1 or more C corporations own, 
        directly or indirectly (determined in accordance with section 
        707(b)(3)), more than 50 percent of the capital interest, or 
        profits interest, in such partnership at the time of the 
        involuntary conversion, and
            (C) any other taxpayer if, with respect to property which is 
        involuntarily converted during the taxable year, the aggregate 
        of the amount of realized gain on such property on which there 
        is realized gain exceeds $100,000.

    In the case of a partnership, subparagraph (C) shall apply with 
    respect to the partnership and with respect to each partner. A 
    similar rule shall apply in the case of an S corporation and its 
    shareholders.

                         (3) Related person

        For purposes of this subsection, a person is related to another 
    person if the person bears a relationship to the other person 
    described in section 267(b) or 707(b)(1).

(j) Sales or exchanges to implement microwave relocation policy

                           (1) In general

        For purposes of this subtitle, if a taxpayer elects the 
    application of this subsection to a qualified sale or exchange, such 
    sale or exchange shall be treated as an involuntary conversion to 
    which this section applies.

                   (2) Qualified sale or exchange

        For purposes of paragraph (1), the term ``qualified sale or 
    exchange'' means a sale or exchange before January 1, 2000, which is 
    certified by the Federal Communications Commission as having been 
    made by a taxpayer in connection with the relocation of the taxpayer 
    from the 1850-1990MHz spectrum by reason of the Federal 
    Communications Commission's reallocation of that spectrum for use 
    for personal communications services. The Commission shall transmit 
    copies of certifications under this paragraph to the Secretary.

(k) Cross references

            (1) For determination of the period for which the taxpayer 
        has held property involuntarily converted, see section 1223.
            (2) For treatment of gains from involuntary conversions as 
        capital gains in certain cases, see section 1231(a).
            (3) For exclusion from gross income of gain from involuntary 
        conversion of principal residence, see section 121.

(Aug. 16, 1954, ch. 736, 68A Stat. 303; June 29, 1956, ch. 464, 
Sec. 5(a), 70 Stat. 407; Pub. L. 85-866, title I, Secs. 45, 46(a), Sept. 
2, 1958, 72 Stat. 1641; Pub. L. 88-272, title II, Sec. 206(b)(3), Feb. 
26, 1964, 78 Stat. 40; Pub. L. 91-172, title IX, Sec. 915(a), Dec. 30, 
1969, 83 Stat. 723; Pub. L. 94-455, title XIX, Secs. 1901(a)(128), 
1906(b)(13)(A), title XXI, Secs. 2127(a), 2140(a), Oct. 4, 1976, 90 
Stat. 1785, 1834, 1920, 1932; Pub. L. 95-600, title IV, Sec. 404(c)(4), 
title V, Sec. 542(a), title VII, Sec. 703(j)(5), Nov. 6, 1978, 92 Stat. 
2870, 2888, 2941; Pub. L. 97-34, title II, Sec. 202(d)(2), Aug. 13, 
1981, 95 Stat. 221; Pub. L. 98-369, div. A, title IV, Sec. 474(r)(24), 
July 18, 1984, 98 Stat. 844; Pub. L. 101-508, title XI, 
Sec. 11813(b)(20), Nov. 5, 1990, 104 Stat. 1388-555; Pub. L. 103-66, 
title XIII, Sec. 13431(a), Aug. 10, 1993, 107 Stat. 567; Pub. L. 104-7, 
Sec. 3(a)(1), (b)(1), Apr. 11, 1995, 109 Stat. 94, 95; Pub. L. 104-188, 
title I, Secs. 1119(a), (b), 1610(a), Aug. 20, 1996, 110 Stat. 1765, 
1844; Pub. L. 105-34, title III, Sec. 312(d)(1), (7), title IX, 
Sec. 913(b), title X, Sec. 1087(a), Aug. 5, 1997, 111 Stat. 839, 840, 
878, 959.)

                       References in Text

    The Disaster Relief and Emergency Assistance Act, referred to in 
subsec. (h)(3), is Pub. L. 93-288, May 22, 1974, 88 Stat. 143, as 
amended, known as the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act, which is classified principally to chapter 68 (Sec. 5121 
et seq.) of Title 42, The Public Health and Welfare. For complete 
classification of this Act to the Code, see Short Title note set out 
under section 5121 of Title 42 and Tables.


                               Amendments

    1997--Subsec. (e). Pub. L. 105-34, Sec. 913(b), inserted ``, flood, 
or other weather-related conditions'' after ``drought'' in heading and 
``, flood, or other weather-related conditions'' before period at end of 
text.
    Subsec. (h)(4). Pub. L. 105-34, Sec. 312(d)(1), substituted 
``section 121'' for ``section 1034''.
    Subsec. (i). Pub. L. 105-34, Sec. 1087(a), amended heading and text 
of subsec. (i) generally. Prior to amendment, text read as follows:
    ``(1) In general.--In the case of--
        ``(A) a C corporation, or
        ``(B) a partnership in which 1 or more C corporations own, 
    directly or indirectly (determined in accordance with section 
    707(b)(3)), more than 50 percent of the capital interest, or profits 
    interest, in such partnership at the time of the involuntary 
    conversion,
subsection (a) shall not apply if the replacement property or stock is 
acquired from a related person. The preceding sentence shall not apply 
to the extent that the related person acquired the replacement property 
or stock from an unrelated person during the period described in 
subsection (a)(2)(B).
    ``(2) Related person.--For purposes of this subsection, a person is 
related to another person if the person bears a relationship to the 
other person described in section 267(b) or 707(b)(1).''
    Subsec. (k)(3). Pub. L. 105-34, Sec. 312(d)(7), amended par. (3) 
generally. Prior to amendment, par. (3) read as follows: ``For one-time 
exclusion from gross income of gain from involuntary conversion of 
principal residence by individual who has attained age 55, see section 
121.''
    1996--Subsec. (b). Pub. L. 104-188, Sec. 1610(a), reenacted heading 
without change and amended text generally. Prior to amendment, text read 
as follows: ``If the property was acquired, after February 28, 1913, as 
the result of a compulsory or involuntary conversion described in 
subsection (a)(1) or section 112(f)(2) of the Internal Revenue Code of 
1939, the basis shall be the same as in the case of the property so 
converted, decreased in the amount of any money received by the taxpayer 
which was not expended in accordance with the provisions of law 
(applicable to the year in which such conversion was made) determining 
the taxable status of the gain or loss upon such conversion, and 
increased in the amount of gain or decreased in the amount of loss to 
the taxpayer recognized upon such conversion under the law applicable to 
the year in which such conversion was made. This subsection shall not 
apply in respect of property acquired as a result of a compulsory or 
involuntary conversion of property used by the taxpayer as his principal 
residence if the destruction, theft, seizure, requisition, or 
condemnation of such residence, or the sale or exchange of such 
residence under threat or imminence thereof, occurred after December 31, 
1950, and before January 1, 1954. In the case of property purchased by 
the taxpayer in a transaction described in subsection (a)(3) which 
resulted in the nonrecognition of any part of the gain realized as the 
result of a compulsory or involuntary conversion, the basis shall be the 
cost of such property decreased in the amount of the gain not so 
recognized; and if the property purchased consists of more than one 
piece of property, the basis determined under this sentence shall be 
allocated to the purchased properties in proportion to their respective 
costs.''
    Subsec. (h). Pub. L. 104-188, Sec. 1119(b)(2), substituted 
``property'' for ``principal residences'' in heading.
    Subsec. (h)(1). Pub. L. 104-188, Sec. 1119(b)(3), substituted 
``Principal residences'' for ``In general'' in heading.
    Subsec. (h)(2). Pub. L. 104-188, Sec. 1119(a), added par. (2). 
Former par. (2) redesignated (3).
    Subsec. (h)(3). Pub. L. 104-188, Sec. 1119(a), (b)(1), redesignated 
par. (2) as (3) and substituted ``property'' for ``residence'' before 
``is located''. Former par. (3) redesignated (4).
    Subsec. (h)(4). Pub. L. 104-188, Sec. 1119(a), redesignated par. (3) 
as (4).
    1995--Subsec. (i). Pub. L. 104-7, Sec. 3(a)(1), added subsec. (i). 
Former subsec. (i) redesignated (j).
    Subsec. (j). Pub. L. 104-7, Sec. 3(b)(1), added subsec. (j). Former 
subsec. (j) redesignated (k).
    Pub. L. 104-7, Sec. 3(a)(1), redesignated subsec. (i) as (j).
    Subsec. (k). Pub. L. 104-7, Sec. 3(b)(1), redesignated subsec. (j) 
as (k).
    1993--Subsecs. (h), (i). Pub. L. 103-66 added subsec. (h) and 
redesignated former subsec. (h) as (i).
    1990--Subsec. (g)(3)(A). Pub. L. 101-508 struck out ``with respect 
to which the investment credit determined under section 46(a) is or has 
been claimed or'' after ``to any property''.
    1984--Subsec. (g)(3)(A). Pub. L. 98-369 substituted ``the investment 
credit determined under section 46(a)'' for ``the credit allowed by 
section 38 (relating to investment in certain depreciable property)''.
    1981--Subsec. (g)(3)(A). Pub. L. 97-34 substituted ``(relating to 
election to expense certain depreciable business assets)'' for 
``(relating to additional first-year depreciation allowance for small 
business)''.
    1978--Subsec. (a)(2)(A)(ii). Pub. L. 95-600, Sec. 703(j)(5), 
substituted ``subsection (b)'' for ``subsection (c)''.
    Subsecs. (f), (g). Pub. L. 95-600, Sec. 542(a), added subsec. (f) 
and redesignated former subsecs. (f) and (g) as (g) and (h), 
respectively.
    Subsec. (h). Pub. L. 95-600, Secs. 404(c)(4), 542(a), redesignated 
subsec. (g) as (h) and substituted in par. (3) ``one-time exclusion'' 
for ``exclusion'' and ``age 55'' for ``age 65''.
    1976--Subsec. (a)(2), (3). Pub. L. 94-455, Secs. 1901(a)(128)(A), 
(B), 1906(b)(13)(A), redesignated par. (3) as (2), struck out in heading 
``where disposition occurred after 1950'' after ``Conversion into 
money'', in provisions preceding subpar. (A) ``and the disposition of 
the converted property (as defined in paragraph (2)) occurred after 
December 31, 1950,'' after ``use to the converted property,'' and in 
subpar. (B)(ii) ``or his delegate'' after ``Secretary'' wherever 
appearing, and added subpar. (E). Former par. (2), which related to 
involuntary conversions into money where dispositions occurred prior to 
1951, was struck out.
    Subsec. (b). Pub. L. 94-455, Sec. 1901(a)(128)(C), (D), redesignated 
subsec. (c) as (b) and substituted ``or section 112(f)(2) of the 
Internal Revenue Code of 1939'' for ``or (2)''. Former subsec. (b), 
which related to application of subsec. (a) in the case of property used 
by taxpayer as his principal residence, if the destruction, theft, etc., 
occurred after 1950 and before 1954, was struck out.
    Subsecs. (c) to (e). Pub. L. 94-455, Sec. 1901(a)(128)(C), 
redesignated subsecs. (d) to (f) as (c) to (e), respectively. Former 
subsec. (c) redesignated (b).
    Subsec. (f). Pub. L. 94-455, Secs. 1901(a)(128)(C), (E), (F), 
2127(a), 2140(a), redesignated subsec. (g) as (f), in par. (2) struck 
out provisions relating to conversion of real property before Jan. 1, 
1958, and substituted reference to subsection (a)(2)(A) for reference to 
subsection (a)(3)(A), and added pars. (3) and (4). Former subsec. (f) 
redesignated (e).
    Subsecs. (g), (h). Pub. L. 94-455, Sec. 1901(a)(128)(C), 
redesignated subsec. (h) as (g). Former subsec. (g) redesignated (f).
    1969--Subsec. (a)(3)(B). Pub. L. 91-172 substituted ``2 years'' for 
``one year''.
    1964--Subsec. (h)(3). Pub. L. 88-272 added par. (3).
    1958--Subsec. (a)(2). Pub. L. 85-866, Sec. 45, inserted provision 
defining ``control''.
    Subsecs. (g), (h). Pub. L. 85-866, Sec. 46(a), added subsec. (g) and 
redesignated former subsec. (g) as (h).
    1956--Subsecs. (f), (g). Act June 29, 1956, added subsec. (f) and 
redesignated former subsec. (f) as (g).


                    Effective Date of 1997 Amendment

    Amendment by section 312(d)(1), (7) of Pub. L. 105-34 applicable to 
sales and exchanges after May 6, 1997, with certain exceptions, see 
section 312(d) of Pub. L. 105-34, set out as a note under section 121 of 
this title.
    Amendment by section 913(b) of Pub. L. 105-34 applicable to sales 
and exchanges after Dec. 31, 1996, see section 913(c) of Pub. L. 105-34, 
set out as a note under section 451 of this title.
    Section 1087(b) of Pub. L. 105-34 provided that: ``The amendment 
made by this section [amending this section] shall apply to involuntary 
conversions occurring after June 8, 1997.''


                    Effective Date of 1996 Amendment

    Section 1119(d)(1) of Pub. L. 104-188 provided that: ``The 
amendments made by this section [amending this section] shall apply to 
disasters declared after December 31, 1994, in taxable years ending 
after such date.''
    Section 1610(b) of Pub. L. 104-188 provided that: ``The amendment 
made by this section [amending this section] shall apply to involuntary 
conversions occurring after the date of the enactment of this Act [Aug. 
20, 1996].''


                    Effective Date of 1995 Amendment

    Section 3(a)(2) of Pub. L. 104-7 provided that: ``The amendment made 
by paragraph (1) [amending this section] shall apply to involuntary 
conversions occurring on or after February 6, 1995.''
    Section 3(b)(2) of Pub. L. 104-7 provided that: ``The amendment made 
by paragraph (1) [amending this section] shall apply to sales or 
exchanges after March 14, 1995.''


                    Effective Date of 1993 Amendment

    Section 13431(b) of Pub. L. 103-66 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to property 
compulsorily or involuntarily converted as a result of disasters for 
which the determination referred to in section 1033(h)(2) of the 
Internal Revenue Code of 1986 (as added by this section) is made on or 
after September 1, 1991, and to taxable years ending on or after such 
date.''


                    Effective Date of 1990 Amendment

    Amendment by Pub. L. 101-508 applicable to property placed in 
service after Dec. 31, 1990, but not applicable to any transition 
property (as defined in section 49(e) of this title), any property with 
respect to which qualified progress expenditures were previously taken 
into account under section 46(d) of this title, and any property 
described in section 46(b)(2)(C) of this title, as such sections were in 
effect on Nov. 4, 1990, see section 11813(c) of Pub. L. 101-508, set out 
as a note under section 29 of this title.


                    Effective Date of 1984 Amendment

    Amendment by Pub. L. 98-369 applicable to taxable years beginning 
after Dec. 31, 1983, and to carrybacks from such years, see section 
475(a) of Pub. L. 98-369, set out as a note under section 21 of this 
title.


                    Effective Date of 1981 Amendment

    Amendment by Pub. L. 97-34 applicable to property placed in service 
after Dec. 31, 1980, in taxable years ending after that date, see 
section 209(a) of Pub. L. 97-34, set out as an Effective Date note under 
section 168 of this title.


                    Effective Date of 1978 Amendment

    Amendment by section 404(c)(4) of Pub. L. 95-600 applicable to sales 
or exchanges after July 26, 1978, in taxable years ending after such 
date, see section 404(d)(1) of Pub. L. 95-600, set out as a note under 
section 121 of this title.
    Section 542(b) of Pub. L. 95-600 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply with respect 
to taxable years beginning after December 31, 1974.''
    Amendment by section 703(j)(5) of Pub. L. 95-600 effective on Oct. 
4, 1976, see section 703(r) of Pub. L. 95-600, set out as a note under 
section 46 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1901(a)(128) of Pub. L. 94-455 effective for 
taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. 
L. 94-455, set out as a note under section 2 of this title.
    Section 2127(b) of Pub. L. 94-455 provided that: ``The amendment 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1970.''
    Section 2140(b) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendment 
made by this section [amending this section] shall apply with respect to 
any disposition of converted property (within the meaning of section 
1033(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) 
after December 31, 1974, unless a condemnation proceeding with respect 
to such property began before the date of the enactment of this Act 
[Oct. 4, 1976].''


                    Effective Date of 1969 Amendment

    Section 915(b) of Pub. L. 91-172, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``The amendment 
made by this section [amending this section] shall apply only if the 
disposition of the converted property (within the meaning of section 
1033(a)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]) 
occurs after the date of the enactment of this Act [Dec. 30, 1969].''


                    Effective Date of 1964 Amendment

    Amendment by Pub. L. 88-272 applicable to dispositions after Dec. 
31, 1963, in taxable years ending after such date, see section 206(c) of 
Pub. L. 88-272, set out as an Effective Date note under section 121 of 
this title.


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-866 applicable to taxable years beginning 
after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c)(1) 
of Pub. L. 85-866, set out as a note under section 165 of this title.


                    Effective Date of 1956 Amendment

    Section 5(b) of act June 29, 1956, provided that: ``The amendment 
made by this section [amending this section] shall apply with respect to 
taxable years ending after December 31, 1955, but only in the case of 
sales and exchanges of livestock after December 31, 1955.''


                            Savings Provision

    For provisions that nothing in amendment by Pub. L. 101-508 be 
construed to affect treatment of certain transactions occurring, 
property acquired, or items of income, loss, deduction, or credit taken 
into account prior to Nov. 5, 1990, for purposes of determining 
liability for tax for periods ending after Nov. 5, 1990, see section 
11821(b) of Pub. L. 101-508, set out as a note under section 29 of this 
title.

                  Section Referred to in Other Sections

    This section is referred to in sections 121, 143, 165, 172, 197, 
381, 453, 857, 1016, 1031, 1223, 1245, 1250, 1351, 2032A, 2057, 6212, 
6504, 7508A of this title; title 25 sections 1716, 1729, 1754.
