§1082
60 citing cases
Statute Text — 26 U.S.C. §1082
Statute text not available for this section.
Treasury Regulations
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Treas. Reg. §1.1082-1Basis for determining gain or loss
(a) For determining the basis of property acquired in a taxable year beginning before January 1, 1942, in any manner described in section 372 of the Internal Revenue Code of 1939 prior to its amendment by the Revenue Act of 1942 (56 Stat. 798), see such section (before its amendment by such Act).
(b) If the property was acquired in a taxable year beginning after December 31, 1941, in any manner described in section 1082 (other than subsection (a)(2)), or section 372 (other than subsection (a)(2)) of the Internal Revenue Code of 1939 after its amendments, the basis shall be that prescribed in section 1082 with respect to such property. However, in the case of property acquired in a transaction described in section 1081(c)(2), this paragraph is applicable only if the property was acquired in a distribution made in a taxable year subject to the Internal Revenue Code of 1954.
(c) Section 1082 makes provisions with respect to the basis of property acquired in a transfer in connection with which the recognition of gain or loss is prohibited by the provisions of section 1081 with respect to the whole or any part of the property received. In general, and except as provided in § 1.1082-3, it is intended that the basis for determining gain or loss pertaining to the property prior to its transfer, as well as the basis for determining the amount of depreciation or depletion deductible and the amount of earnings or profits available for distribution, shall continue notwithstanding the nontaxable conversion of the asset in form or its change in ownership. The continuance of the basis may be reflected in a shift thereof from one asset to another in the hands of the same owner, or in its transfer with the property from one owner into the hands of another. See also § 1.1081-2.
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Treas. Reg. §1.1082-1(a)For determining the basis of property acquired in a taxable year beginning before January 1, 1942, in any manner described in section 372 of the Internal Revenue Code of 1939 prior to its amendment by the Revenue Act of 1942 (56 Stat.
For determining the basis of property acquired in a taxable year beginning before January 1, 1942, in any manner described in section 372 of the Internal Revenue Code of 1939 prior to its amendment by the Revenue Act of 1942 (56 Stat. 798), see such section (before its amendment by such Act).
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Treas. Reg. §1.1082-1(b)If the property was acquired in a taxable year beginning after December 31, 1941, in any manner described in section 1082 (other than subsection (a)(2)), or section 372 (other than subsection (a)(2)) of the Internal Revenue Code of 1939 after its amendments, the basis shall be that prescribed in section 1082 with respect to such property.
If the property was acquired in a taxable year beginning after December 31, 1941, in any manner described in section 1082 (other than subsection (a)(2)), or section 372 (other than subsection (a)(2)) of the Internal Revenue Code of 1939 after its amendments, the basis shall be that prescribed in section 1082 with respect to such property. However, in the case of property acquired in a transaction described in section 1081(c)(2), this paragraph is applicable only if the property was acquired in a distribution made in a taxable year subject to the Internal Revenue Code of 1954.
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Treas. Reg. §1.1082-1(c)Section 1082 makes provisions with respect to the basis of property acquired in a transfer in connection with which the recognition of gain or loss is prohibited by the provisions of section 1081 with respect to the whole or any part of the property received.
Section 1082 makes provisions with respect to the basis of property acquired in a transfer in connection with which the recognition of gain or loss is prohibited by the provisions of section 1081 with respect to the whole or any part of the property received. In general, and except as provided in § 1.1082-3, it is intended that the basis for determining gain or loss pertaining to the property prior to its transfer, as well as the basis for determining the amount of depreciation or depletion deductible and the amount of earnings or profits available for distribution, shall continue notwithstanding the nontaxable conversion of the asset in form or its change in ownership. The continuance of the basis may be reflected in a shift thereof from one asset to another in the hands of the same owner, or in its transfer with the property from one owner into the hands of another. See also § 1.1081-2.
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Treas. Reg. §1.1082-2Basis of property acquired upon exchanges under section 1081 (a) or (e)
(a) In the case of an exchange of stock or securities for stock or securities as described in section 1081 (a), if no part of the gain or loss upon such exchange was recognized under section 1081, the basis of the property acquired is the same as the basis of the property transferred by the taxpayer with proper adjustments to the date of the exchange.
(b) If, in an exchange of stock or securities as described in section 1081 (a), gain to the taxpayer was recognized under section 1081 (e) on account of the receipt of money, the basis of the property acquired is the basis of the property transferred (adjusted to the date of the exchange), decreased by the amount of money received and increased by the amount of gain recognized upon the exchange. If, upon such exchange, there were received by the taxpayer money and other nonexempt property (not permitted to be received without the recognition of gain), and gain from the transaction was recognized under section 1081 (e), the basis (adjusted to the date of the exchange) of the property transferred by the taxpayer, decreased by the amount of money received and increased by the amount of gain recognized, must be apportioned to and is the basis of the properties (other than money) received on the exchange. For the purpose of the allocation of such basis to the properties received, there must be assigned to the nonexempt property (other than money) an amount equivalent to its fair market value at the date of the exchange.
(c) Section 1081(e) provides that no loss may be recognized on an exchange of stock or securities for stock or securities as described in section 1081(a), although the taxpayer receives money or other nonexempt property from the transaction. However, the basis of the property (other than money) received by the taxpayer is the basis (adjusted to the date of the exchange) of the property transferred, decreased by the amount of money received. This basis must be apportioned to the properties received, and for this purpose there must be allocated to the nonexempt property (other than money) an amount of such basis equivalent to the fair market value of such nonexempt property at the date of the exchange.
(d) Section 1082 (a) does not apply in ascertaining the basis of property acquired by a corporation by the issuance of its stock or securities as the consideration in whole or in part for the transfer of the property to it. For the rule in such cases, see section 1082 (b).
(e) For purposes of this section, any reference to section 1081 shall be deemed to include a reference to corresponding provisions of prior internal revenue laws.
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Treas. Reg. §1.1082-2(a)In the case of an exchange of stock or securities for stock or securities as described in section 1081 (a), if no part of the gain or loss upon such exchange was recognized under section 1081, the basis of the property acquired is the same as the basis of the property transferred by the taxpayer with proper adjustments to the date of the exchange.
In the case of an exchange of stock or securities for stock or securities as described in section 1081 (a), if no part of the gain or loss upon such exchange was recognized under section 1081, the basis of the property acquired is the same as the basis of the property transferred by the taxpayer with proper adjustments to the date of the exchange.
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Treas. Reg. §1.1082-2(b)If, in an exchange of stock or securities as described in section 1081 (a), gain to the taxpayer was recognized under section 1081 (e) on account of the receipt of money, the basis of the property acquired is the basis of the property transferred (adjusted to the date of the exchange), decreased by the amount of money received and increased by the amount of gain recognized upon the exchange.
If, in an exchange of stock or securities as described in section 1081 (a), gain to the taxpayer was recognized under section 1081 (e) on account of the receipt of money, the basis of the property acquired is the basis of the property transferred (adjusted to the date of the exchange), decreased by the amount of money received and increased by the amount of gain recognized upon the exchange. If, upon such exchange, there were received by the taxpayer money and other nonexempt property (not permitted to be received without the recognition of gain), and gain from the transaction was recognized under section 1081 (e), the basis (adjusted to the date of the exchange) of the property transferred by the taxpayer, decreased by the amount of money received and increased by the amount of gain recognized, must be apportioned to and is the basis of the properties (other than money) received on the exchange. For the purpose of the allocation of such basis to the properties received, there must be assigned to the nonexempt property (other than money) an amount equivalent to its fair market value at the date of the exchange.
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Treas. Reg. §1.1082-2(c)Section 1081(e) provides that no loss may be recognized on an exchange of stock or securities for stock or securities as described in section 1081(a), although the taxpayer receives money or other nonexempt property from the transaction.
Section 1081(e) provides that no loss may be recognized on an exchange of stock or securities for stock or securities as described in section 1081(a), although the taxpayer receives money or other nonexempt property from the transaction. However, the basis of the property (other than money) received by the taxpayer is the basis (adjusted to the date of the exchange) of the property transferred, decreased by the amount of money received. This basis must be apportioned to the properties received, and for this purpose there must be allocated to the nonexempt property (other than money) an amount of such basis equivalent to the fair market value of such nonexempt property at the date of the exchange.
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Treas. Reg. §1.1082-2(d)Section 1082 (a) does not apply in ascertaining the basis of property acquired by a corporation by the issuance of its stock or securities as the consideration in whole or in part for the transfer of the property to it.
Section 1082 (a) does not apply in ascertaining the basis of property acquired by a corporation by the issuance of its stock or securities as the consideration in whole or in part for the transfer of the property to it. For the rule in such cases, see section 1082 (b).
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Treas. Reg. §1.1082-2(e)For purposes of this section, any reference to section 1081 shall be deemed to include a reference to corresponding provisions of prior internal revenue laws.
For purposes of this section, any reference to section 1081 shall be deemed to include a reference to corresponding provisions of prior internal revenue laws.
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Treas. Reg. §1.1082-3Reduction of basis of property by reason of gain not recognized under section 1081(b)
(a) Introductory. In addition to the adjustments provided in section 1016 and other applicable provisions of chapter 1 of the Code, and the regulations relating thereto, which are required to be made with respect to the cost or other basis of property, section 1082(a)(2) provides that a further adjustment shall be made in any case in which there shall have been a nonrecognition of gain under section 1081(b). Such further adjustment shall be made with respect to the basis of the property in the hands of the transferor immediately after the transfer and of the property acquired within 24 months after such transfer by an expenditure or investment to which section 1081(b) relates, and on account of which expenditure or investment gain is not recognized. If the property is in the hands of the transferor immediately after the transfer, the time of reduction is the day of the transfer; in all other cases the time of reduction is the date of acquisition. The effect of applying an amount in reduction of basis of property under section 1081 (b) is to reduce by such amount the basis for determining gain upon sale or other disposition, the basis for determining loss upon sale or other disposition, the basis for depreciation and for depletion, and any other amount which the Code prescribes shall be the same as any of such bases. For the purposes of the application of an amount in reduction of basis under section 1081(b), property is not considered as having a basis capable of reduction if—
(1) It is money, or
(2) If its adjusted basis for determining gain at the time the reduction is to be made is zero, or becomes zero at any time in the application of section 1081 (b).
(b) General rule. (1) Section 1082 (a)(2) sets forth seven categories of property, the basis of which for determining gain or loss shall be reduced in the order stated.
(2) If any of the property in the first category has a basis capable of reduction, the reduction must first be made before applying an amount in reduction of the basis of any property in the second or in a succeeding category, to each of which in turn a similar rule is applied.
(3) In the application of the rule to each category, the amount of the gain not recognized shall be applied to reduce the cost or other basis of all the property in the category as follows: The cost or other basis (at the time immediately after the transfer or, if the property is not then held but is thereafter acquired, at the time of such acquisition) of each unit of property in the first category shall be decreased (but the amount of the decrease shall not be more than the amount of the adjusted basis at such time for determining gain, determined without regard to this section) in an amount equal to such proportion of the unrecognized gain as the adjusted basis (for determining gain, determined without regard to this section) at such time of each unit of property of the taxpayer in that category bears to the aggregate of the adjusted basis (for determining gain, computed without regard to this section) at such time of all the property of the taxpayer in that category. When such adjusted basis of the property in the first category has been thus reduced to zero, a similar rule shall be applied, with respect to the portion of such gain which is unabsorbed in such reduction of the basis of the property in such category, in reducing the basis of the property in the second category. A similar rule with respect to the remaining unabsorbed gain shall be applied in reducing the basis of the property in the next succeeding category.
(c) Special cases. (1) With the consent of the Commissioner, the taxpayer may, however, have the basis of the various units of property within a particular category specified in section 1082(a)(2) adjusted in a manner different from the general rule set forth in paragraph (b) of this section. Variations from such general rule may, for example, involve adjusting the basis of only certain units of the taxpayer's property within a given category. A request for variations from the general rule should be filed by the taxpayer with its income tax return for the taxable year in which the transfer of property has occurred.
(2) Agreement between the taxpayer and the Commissioner as to any variations from such general rule shall be effective only if incorporated in a closing agreement entered into under the provisions of section 7121. If no such agreement is entered into by the taxpayer and the Commissioner, then the consent filed on Form 982 shall (except as otherwise provided in this subparagraph) be deemed to be a consent to the application of such general rule, and such general rule shall apply in the determination of the basis of the taxpayer's property. If, however, the taxpayer specifically states on such form that it does not consent to the application of the general rule, then, in the absence of a closing agreement, the document filed shall not be deemed a consent within the meaning of section 1081(b)(4).
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Treas. Reg. §1.1082-3(a)Introductory.
Introductory. In addition to the adjustments provided in section 1016 and other applicable provisions of chapter 1 of the Code, and the regulations relating thereto, which are required to be made with respect to the cost or other basis of property, section 1082(a)(2) provides that a further adjustment shall be made in any case in which there shall have been a nonrecognition of gain under section 1081(b). Such further adjustment shall be made with respect to the basis of the property in the hands of the transferor immediately after the transfer and of the property acquired within 24 months after such transfer by an expenditure or investment to which section 1081(b) relates, and on account of which expenditure or investment gain is not recognized. If the property is in the hands of the transferor immediately after the transfer, the time of reduction is the day of the transfer; in all other cases the time of reduction is the date of acquisition. The effect of applying an amount in reduction of basis of property under section 1081 (b) is to reduce by such amount the basis for determining gain upon sale or other disposition, the basis for determining loss upon sale or other disposition, the basis for depreciation and for depletion, and any other amount which the Code prescribes shall be the same as any of such bases. For the purposes of the application of an amount in reduction of basis under section 1081(b), property is not considered as having a basis capable of reduction if—
(1) It is money, or
(2) If its adjusted basis for determining gain at the time the reduction is to be made is zero, or becomes zero at any time in the application of section 1081 (b).
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Treas. Reg. §1.1082-3(b)General rule.
General rule. (1) Section 1082 (a)(2) sets forth seven categories of property, the basis of which for determining gain or loss shall be reduced in the order stated.
(2) If any of the property in the first category has a basis capable of reduction, the reduction must first be made before applying an amount in reduction of the basis of any property in the second or in a succeeding category, to each of which in turn a similar rule is applied.
(3) In the application of the rule to each category, the amount of the gain not recognized shall be applied to reduce the cost or other basis of all the property in the category as follows: The cost or other basis (at the time immediately after the transfer or, if the property is not then held but is thereafter acquired, at the time of such acquisition) of each unit of property in the first category shall be decreased (but the amount of the decrease shall not be more than the amount of the adjusted basis at such time for determining gain, determined without regard to this section) in an amount equal to such proportion of the unrecognized gain as the adjusted basis (for determining gain, determined without regard to this section) at such time of each unit of property of the taxpayer in that category bears to the aggregate of the adjusted basis (for determining gain, computed without regard to this section) at such time of all the property of the taxpayer in that category. When such adjusted basis of the property in the first category has been thus reduced to zero, a similar rule shall be applied, with respect to the portion of such gain which is unabsorbed in such reduction of the basis of the property in such category, in reducing the basis of the property in the second category. A similar rule with respect to the remaining unabsorbed gain shall be applied in reducing the basis of the property in the next succeeding category.
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Treas. Reg. §1.1082-3(c)Special cases.
Special cases. (1) With the consent of the Commissioner, the taxpayer may, however, have the basis of the various units of property within a particular category specified in section 1082(a)(2) adjusted in a manner different from the general rule set forth in paragraph (b) of this section. Variations from such general rule may, for example, involve adjusting the basis of only certain units of the taxpayer's property within a given category. A request for variations from the general rule should be filed by the taxpayer with its income tax return for the taxable year in which the transfer of property has occurred.
(2) Agreement between the taxpayer and the Commissioner as to any variations from such general rule shall be effective only if incorporated in a closing agreement entered into under the provisions of section 7121. If no such agreement is entered into by the taxpayer and the Commissioner, then the consent filed on Form 982 shall (except as otherwise provided in this subparagraph) be deemed to be a consent to the application of such general rule, and such general rule shall apply in the determination of the basis of the taxpayer's property. If, however, the taxpayer specifically states on such form that it does not consent to the application of the general rule, then, in the absence of a closing agreement, the document filed shall not be deemed a consent within the meaning of section 1081(b)(4).
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Treas. Reg. §1.1082-4Basis 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
If, in connection with an exchange of stock or securities for stock or securities as described in section 1081(a), or an exchange of property for property as described in section 1081(b), or an exchange as described in section 1081(e), property is acquired by a corporation by the issuance of its stock or securities, the basis of such property shall be determined under section 1082(b). If the corporation issued its stock or securities as part or sole consideration for the property acquired, the basis of the property in the hands of the acquiring corporation is the basis (adjusted to the date of the exchange) which the property would have had in the hands of the transferor if the transfer had not been made, increased in the amount of gain or decreased in the amount of loss recognized under section 1081 to the transferor upon the transfer. If any property is acquired by a corporation from a shareholder as paid-in surplus, or from any person as a contribution to capital, the basis of the property to the corporation is the basis (adjusted to the date of acquisition) of the property in the hands of the transferor.
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Treas. Reg. §1.1082-5Basis of property acquired by shareholder upon tax-free distribution under section 1081(c) (1) or (2)
(a) Stock or securities. If there was distributed to a shareholder in a corporation which is a registered holding company or a majority-owned subsidiary company, stock or securities (other than stock or securities which are nonexempt property), and if by virtue of section 1081 (c)(1) no gain was recognized to the shareholder upon such distribution, then the basis of the stock in respect of which the distribution was made must be apportioned between such stock and the stock or securities so distributed to the shareholder. The basis of the old shares and the stock or securities received upon the distribution shall be determined in accordance with the following rules:
(1) If the stock or securities received upon the distribution consist solely of stock in the distributing corporation and the stock received is all of substantially the same character and preference as the stock in respect of which the distribution is made, the basis of each share will be the quotient of the cost or other basis of the old shares of stock divided by the total number of the old and the new shares.
(2) If the stock or securities received upon the distribution are in whole or in part stock in a corporation other than the distributing corporation, or are in whole or in part stock of a character or preference materially different from the stock in respect of which the distribution is made, or if the distribution consists in whole or in part of securities other than stock, the cost or other basis of the stock in respect of which the distribution is made shall be apportioned between such stock and the stock or securities distributed in proportion, as nearly as may be, to the respective values of each class of stock or security, old and new, at the time of such distribution, and the basis of each share of stock or unit of security will be the quotient of the cost or other basis of the class of stock or security to which such share or unit belongs, divided by the number of shares or units in the class. Within the meaning of this subparagraph, stocks or securities in one corporation are different in class from stocks or securities in another corporation, and, in general, any material difference in character or preference or terms sufficient to distinguish one stock or security from another stock or security, so that different values may properly be assigned thereto, will constitute a difference in class.
(b) Stock rights. If there was distributed to a shareholder in a corporation rights to acquire common stock in a second corporation, and if by virtue of section 1081 (c)(2) no gain was recognized to the shareholder upon such distribution, then the basis of the stock in respect of which the distribution was made must be apportioned between such stock and the stock rights so distributed to the shareholder. The basis of such stock and the stock rights received upon the distribution shall be determined in accordance with the following:
(1) The cost or other basis of the stock in respect of which the distribution is made shall be apportioned between such stock and the stock rights distributed, in proportion to the respective values thereof at the time the rights are issued.
(2) The basis for determining gain or loss from the sale of a right, or from the sale of a share of stock in respect of which the distribution is made, will be the quotient of the cost or other basis, properly adjusted, assigned to the rights or the stock, divided, as the case may be, by the number of rights acquired or by the number of shares of such stock held.
(c) Cross reference. As to the basis of stock or securities distributed by one member of a system group to another member of the same system group, see § 1.1082-6.
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Treas. Reg. §1.1082-5(a)Stock or securities.
Stock or securities. If there was distributed to a shareholder in a corporation which is a registered holding company or a majority-owned subsidiary company, stock or securities (other than stock or securities which are nonexempt property), and if by virtue of section 1081 (c)(1) no gain was recognized to the shareholder upon such distribution, then the basis of the stock in respect of which the distribution was made must be apportioned between such stock and the stock or securities so distributed to the shareholder. The basis of the old shares and the stock or securities received upon the distribution shall be determined in accordance with the following rules:
(1) If the stock or securities received upon the distribution consist solely of stock in the distributing corporation and the stock received is all of substantially the same character and preference as the stock in respect of which the distribution is made, the basis of each share will be the quotient of the cost or other basis of the old shares of stock divided by the total number of the old and the new shares.
(2) If the stock or securities received upon the distribution are in whole or in part stock in a corporation other than the distributing corporation, or are in whole or in part stock of a character or preference materially different from the stock in respect of which the distribution is made, or if the distribution consists in whole or in part of securities other than stock, the cost or other basis of the stock in respect of which the distribution is made shall be apportioned between such stock and the stock or securities distributed in proportion, as nearly as may be, to the respective values of each class of stock or security, old and new, at the time of such distribution, and the basis of each share of stock or unit of security will be the quotient of the cost or other basis of the class of stock or security to which such share or unit belongs, divided by the number of shares or units in the class. Within the meaning of this subparagraph, stocks or securities in one corporation are different in class from stocks or securities in another corporation, and, in general, any material difference in character or preference or terms sufficient to distinguish one stock or security from another stock or security, so that different values may properly be assigned thereto, will constitute a difference in class.
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Treas. Reg. §1.1082-5(b)Stock rights.
Stock rights. If there was distributed to a shareholder in a corporation rights to acquire common stock in a second corporation, and if by virtue of section 1081 (c)(2) no gain was recognized to the shareholder upon such distribution, then the basis of the stock in respect of which the distribution was made must be apportioned between such stock and the stock rights so distributed to the shareholder. The basis of such stock and the stock rights received upon the distribution shall be determined in accordance with the following:
(1) The cost or other basis of the stock in respect of which the distribution is made shall be apportioned between such stock and the stock rights distributed, in proportion to the respective values thereof at the time the rights are issued.
(2) The basis for determining gain or loss from the sale of a right, or from the sale of a share of stock in respect of which the distribution is made, will be the quotient of the cost or other basis, properly adjusted, assigned to the rights or the stock, divided, as the case may be, by the number of rights acquired or by the number of shares of such stock held.
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Treas. Reg. §1.1082-5(c)Cross reference.
Cross reference. As to the basis of stock or securities distributed by one member of a system group to another member of the same system group, see § 1.1082-6.
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Treas. Reg. §1.1082-6Basis of property acquired under section 1081(d) in transactions between corporations of the same system group
(a) If property was acquired by a corporation which is a member of a system group, from a corporation which is a member of the same system group, upon a transfer or distribution described in section 1081 (d)(1), then as a general rule the basis of such property in the hands of the acquiring corporation is the basis which such property would have had in the hands of the transferor if the transfer or distribution had not been made. Except as otherwise indicated in this section, this rule will apply equally to cases in which the consideration for the property acquired consists of stock or securities, money, and other property, or any of them, but it is contemplated that an ultimate true reflection of income will be obtained in all cases, notwithstanding any peculiarities in form which the various transactions may assume. See the example in § 1.1081-6.
(b) An exception to the general rule is provided for in case the property acquired consists of stock or securities issued by the corporation from which such stock or securities were received. If such stock or securities were the sole consideration for the property transferred to the corporation issuing such stock or securities, then the basis of the stock or securities shall be (1) the same as the basis (adjusted to the time of the transfer) of the property transferred for such stock or securities, or (2) the fair market value of such stock or securities at the time of their receipt, whichever is the lower. If such stock or securities constituted only part consideration for the property transferred to the corporation issuing such stock or securities, then the basis shall be an amount which bears the same ratio to the basis of the property transferred as the fair market value of such stock or securities on their receipt bears to the total fair market value of the entire consideration received, except that the fair market value of such stock or securities at the time of their receipt shall be the basis therefor, if such value is lower than such amount.
(c) The application of paragraph (b) of this section may be illustrated by the following examples:
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Treas. Reg. §1.1082-6(a)If property was acquired by a corporation which is a member of a system group, from a corporation which is a member of the same system group, upon a transfer or distribution described in section 1081 (d)(1), then as a general rule the basis of such property in the hands of the acquiring corporation is the basis which such property would have had in the hands of the transferor if the transfer or distribution had not been made.
If property was acquired by a corporation which is a member of a system group, from a corporation which is a member of the same system group, upon a transfer or distribution described in section 1081 (d)(1), then as a general rule the basis of such property in the hands of the acquiring corporation is the basis which such property would have had in the hands of the transferor if the transfer or distribution had not been made. Except as otherwise indicated in this section, this rule will apply equally to cases in which the consideration for the property acquired consists of stock or securities, money, and other property, or any of them, but it is contemplated that an ultimate true reflection of income will be obtained in all cases, notwithstanding any peculiarities in form which the various transactions may assume. See the example in § 1.1081-6.
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Treas. Reg. §1.1082-6(b)An exception to the general rule is provided for in case the property acquired consists of stock or securities issued by the corporation from which such stock or securities were received.
An exception to the general rule is provided for in case the property acquired consists of stock or securities issued by the corporation from which such stock or securities were received. If such stock or securities were the sole consideration for the property transferred to the corporation issuing such stock or securities, then the basis of the stock or securities shall be (1) the same as the basis (adjusted to the time of the transfer) of the property transferred for such stock or securities, or (2) the fair market value of such stock or securities at the time of their receipt, whichever is the lower. If such stock or securities constituted only part consideration for the property transferred to the corporation issuing such stock or securities, then the basis shall be an amount which bears the same ratio to the basis of the property transferred as the fair market value of such stock or securities on their receipt bears to the total fair market value of the entire consideration received, except that the fair market value of such stock or securities at the time of their receipt shall be the basis therefor, if such value is lower than such amount.
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Treas. Reg. §1.1082-6(c)§1.1082-6(c)
The application of paragraph (b) of this section may be illustrated by the following examples:
60 Citing Cases
ed the statute in 1997 to change the carryback period to 2 years and the carryover period to 20 years. 14 provided 3 years for certain portions of net operating losses related to casualty losses. See Taxpayer Relief Act of 1997, Pub. L. No. 105-34, § 1082, 111 Stat. 788, 950. The relevant congressional reports explained that the carryback provisions were intended to address typical business cycles, but that “allowing a two-year carryback of NOLs is sufficient to account for these business cycles
Forms 982, “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)”, filed with the returns for 2011 and 2012 claimed exclusion of the canceled indebtedness as “insolvent”.) The Commissioner filed his answer, which defended the adjustments in the NOD and made affirmative allegations in support of the determination that Mr.
788, 950. On the basis of our review of the returns in the record, we find that petitioners did not elect to waive the NOL carryback period with respect to any of the NOL carryforwards claimed for 2008 and 2009. Petitioners argue that respondent’s failure to produce a more enlightening transcript or pre-1995 tax returns should res
Exterra subsequently filed an amended Form 1120S, in which it reduced its gross receipts by $2,741,399 and attached Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).
by each Loss Subsidiary included as an attachment pages from a “Detail General Ledger” that, in regard to accrued interest and principal on the Deficiency Notes, include entries dated May 1, 2013, with the transaction description “W/O.” Each of those returns also includes Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment).
1082(a), 111 Stat. at 950, amended section 172(b)(1)(A) to include a two-year carryback and twenty-year carryforward. - 21 - [*21] material and pertinent facts, including a detailed schedule showing how they computed their NOL deductions. See sec. 1.172-1(c), Income Tax Regs. The minimum showing that they must make is as follows: ! they had a
Kelly reported the discharge of debt due from his affiliated companies and attached Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), reporting a discharge of indebtedness of $145,559,306 that was excluded from gross income on the basis of his insolvency calculated as follows: Entity Amount Greenback Holdings $2,605,586 JCE 3,793,437 IHSD 7,052,215 FCC 4,200,407 - 40 - [*40] Kelly Hospitality 3,027,829 KY&C 4,299,116 LBHorizons 6,418,852
On Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment), petitioner reported that he had excludable income of $685,281 “for a discharge of qualified real property business indebtedness applied to reduce the basis of depreciable real property” (i.e., the debt discharged from the lending bank).
Petitioners attached Form 982, Reduction ofTax Attributes Due to Discharge ofIndebtedness (and Section 1082 Basis Adjustment), to their return, claiming that their liabilities exceeded their assets by $165,871.
1082, 111 Stat. at 950. Before this amendment sec. 172(b)(1)(A) generally required a 3-year carryback and a 15-year carryover. NOLs and the carryback and carryoverthereofare determined pursuant to the law applicable to the year in which the losses occurred without regard to other years to which losses are carried (continued...) - 13 - [*13] P
1082(a), 111 Stat. at 950. A shareholder ofan S corporation can directly deduct his or her share of entity-level losses in accordance with the flowthrough rules ofsubchapter S. See sec. 1366(a). The losses cannot exceed the sum ofthe shareholder's adjusted basis in his or her stock and the shareholder's adjusted basis in any indebtedness ofthe
Petitioners attached to their 2008 return a Form 982, Reduction ofTax Attributes Due to Discharge ofIndebtedness (and Section 1082 Basis Adjustment).
at amended return ofher treatment in her 2008 return ofpetitioner's claimed COI income of$142,910: "Cancellation ofdebt incorrectly reported as income Form 982 attached." In Form 982, Reduction of Tax Attributes Due to Discharge ofIndebtedness (and Section 1082 Basis Adjust- ment) (Form 982), that petitioner attached to her 2008 amended return, petitioner indicated that petitioner's claimed COI income of$142,910 reported in her 2008 return should have been reported as zero in her 2008 return bec
§§ 1082(o) The administrative record includes two sets ofbylaws for petitioner. The bylaws generally state that petitioner will investigate and report fraudulent activities relating to student loan programs, advocate for student loan recipients, and enforce DOE accreditation standards for all students regardless ofrace or ethnicity. B. Petitioner's
ssioner, 95 T.C. 257, 274 (1990). 14In 1997 sec. 172(b)(1)(A) was amended to generally require a 2-year carryback and a 20-year carryover for NOLs for taxable years beginning after August 5, 1997. See Taxpayer ReliefAct of 1997, Pub. L. No. 105-34, sec. 1082, 111 Stat. at 950. However, NOLs and the carryback and carryforwardthereofare determinedpursuantto the law applicable to the year in which the losses occurred, without regard to the law applicable to other years to which losses are carried b
While petitioner did not report cancellation ofindebtedness income on his 2006 Form 1040, he attached Form 982, Reduction ofTax Attributes Due to Discharge ofIndebtedness (and Section 1082 Basis Adjustment), on which he claimed a reduction oftax attributes due to discharge ofindebtedness income of$110,140.
1082(a), 111 Stat. at 950, an NOL was first carried back 3 tax years and then carried forward for 15. 6 We may determine the amount ofa net operating loss for a year--even ifan assessment oftax for that year is barred--to determine the correct NOL carryover for the tax year that is at issue. See sec. 6214(b); Calumet Indus., Inc. v. Commission
Challenges to the Existence or Amount of Liability You disagree with your liability because you stated you never had an account with Chase Bank and you have never had a credit card from Chase Bank and that Form 982 [Reduction of Tax Attributes Úue to Discharge of Indebtedness (and Section 1082 Basis Adjustment)] would qualify you for insolvency for tax year 2003.
On December 3, 2007, petitioner submitted to respondent Form 982, Reduction of Tax Attributes Due to Discharge'of Indebtedness (and Section 1082 Basis Adjustment), (petitioner's Form 982) .
, 616(a), 617(a)(1), 818(b)(1)(A), 1017(b)(3)(B), 1221(a)(2), 1231(b)(1), 1239(a) and (e), 1245(a)(3), 1250(c), 7871(c)(3)(B)®. Such sections of the 1954 Code were sec. 169(d) (flush language) (repealed 1969), sec. 172(d)(4)(A)(i), sec. 174(b)(1)(C) and (c), sec. 175(c)(1)(A), sec. 615(a) (repealed 1976), sec. 616(a), sec. 1071(a) (repealed 1995), sec. 1082(a)(2)(A) (repealed 2005), sec. 1221(2), sec. 1231(b)(1), sec. 1239(b).
NOL. See Higbee v. Commissioner, 116 T.C. 438 (2001). 4 For purposes of this case involving a 1995 net operating loss and a 1996 taxable year, we consider sec. 172(b)(1)(A) prior to its amendment by the Taxpayer Relief Act of 1997, Pub. L. 105- 34, sec. 1082(a)(1) and (2), 111 Stat. 950. - 6 - taxable year in which the NOL was incurred. Id.; see sec. 301.9100-12T(b), Temporary Proced. & Admin. Regs., 57 Fed. Reg. 43896 (Sept. 23, 1992). Once made, the election is irrevocable. Id. The statute dir
1082(a)(1) and (2), 111 Stat. 950, the carryback and carryover periods were changed. - 5 - arose for which the election is to be in effect. Id. The Secretary is authorized to prescribe the manner for making the election. Sec. 172(b)(3). The Secretary has prescribed the manner for making the election in sec. 301.9100-12T(d), Temporary Proced.
1082(a)(1) and (2), 111 Stat. 950, revised the allowable carryback and carryforward periods to 2 and 20 years, respectively. These amendments do not apply to petitioner’s 1995 and 1996 tax years because the amendment is effective for years after Aug. 5, 1997. - 36 - Section 1.172-1(b), Income Tax Regs., also describes the steps to be taken to
Consequently, the relevant question is whether petitioner’s debt (as opposed to the partnership’s debt) was discharged “in a title 11 case.” 4 Petitioners attached to their 1995 Federal income tax return Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) (Form 982).
1082(a)(1)and (2), 111 Stat. 950, amended sec. 172(b)(1)(A) to require generally a 2-year carryback and a 20-year carryover for NOLs incurred in taxable years beginning after Aug. 5, 1997. Petitioner in his brief claims without discussion that the 20-year rule applies. We disagree. The NOL at issue, if in fact incurred, was incurred well befor
(c)(1)(B) (“to the extent of any basis remaining after the allocation”, “such remaining basis”); sec. 1250(d)(4)(D)(ii) (“the remaining gain not recognized on the transaction”); sec. 4254(a)(2) (“the remaining items not included in any such group”); sec. 1082(a)(2)(G) (“all other remaining property”); sec. 1250(f)(3)(C) (“the remaining property”); sec. 1272(a)(6)(A)(i) (“all remaining payments”); sec. 4943(c)(1) (“the remaining holdings”); sec. 7507(c)(3) (“to the extent of the remaining assets”
1082(a), 111 Stat. 950; see also Intermet Corp. & Subs. v. Commissioner, 117 T.C. 133, 136 n.1 (2001). At the time petitioner filed its Federal income tax return for the tax year ended January 31, 1994, it understated its income tax by $225,753. The tax shown as due on petitioner’s return for the year was zero. The parties agree that for the t
(c)(1)(B) (“to the extent of any basis remaining after the allocation”, “such remaining basis”); sec. 1250(d)(4)(D)(ii) (“the remaining gain not recognized on the transaction”); sec. 4254(a)(2) (“the remaining items not included in any such group”); sec. 1082(a)(2)(G) ("all other remaining property”); sec. 1250(f)(3)(C) (“the remaining property”); sec. 1272(a)(6)(A)(i) (“all remaining payments”); sec. 4943(c)(1) (“the remaining holdings”); sec. 7507(c)(3) (“to the extent of the remaining assets”
1082(a), 111 Stat. 950. 2The Omnibus Budget Reconciliation Act of 1990 (OBRA 1990), Pub. L. 101-508, sec. 11811(b), 104 Stat. 1388-532, combined former sec. 172(j) (relating to product liability losses) and 172(k) (relating to deferred statutory or tort liability losses) redesignating them sec. 172(f). The provision is effective for net operat
1082(a)(1) and (2), 111 Stat. 950. - 4 - period with respect to the net operating loss incurred in the taxable year ending December 31, 1994.” The only questionable aspect about petitioners’ statement is that they referred to section 172(B)(3) instead of section 172(b)(3). The use of the upper case “B”, however, does not create confusion as t
Section 172(b)(1)(A) generally provides that the carryback period for an NOL is 3 years and that the carryover period is 15 years.1 Section 172(b)(1)(C) provides a special rule that extends the carryback period from 3 years to 10 years for specified liability losses.
ule of section 1366(b) could apply to a solvent shareholder of an insolvent S corporation.2 2 It’s interesting but irrelevant that petitioner’s Form 1040 for 1991 includes a Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)) that indicates petitioner was also insolvent and had substantial COD unrelated to MAI that was applied in reduction of his own NOL for the year and carryovers from prior years.
It’s interesting but irrelevant that petitioner’s Form 1040 for 1991 includes a Form 982 (Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)) that indicates petitioner was also insolvent and had substantial COD unrelated to MAI that was applied in reduction of his own NOL for the year and carryovers from prior years.