26 USC 1312 - Circumstances of adjustment

U.S Code last checked for updates: Nov 23, 2024

§ 1312.

Circumstances of adjustment

The circumstances under which the adjustment provided in section 1311 is authorized are as follows:

(1)

Double inclusion of an item of gross income

(2)

Double allowance of a deduction or credit

(3)

Double exclusion of an item of gross income

(A)

Items included in income

(B)

Items not included in income

(4)

Double disallowance of a deduction or credit

(5)

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

(6)

Correlative deductions and credits for certain related corporations

(7)

Basis of property after erroneous treatment of a prior transaction

(A)

General rule

(B)

Taxpayers with respect to whom the erroneous treatment occurred

The taxpayer with respect to whom the erroneous treatment occurred must be—

(i)

the taxpayer with respect to whom the determination is made,

(ii)

a taxpayer who acquired title to the property in the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title, or

(iii)

a taxpayer who had title to the property at the time of the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title, if the basis of the property in the hands of the taxpayer with respect to whom the determination is made is determined under section 1015(a) (relating to the basis of property acquired by gift).

(C)

Prior erroneous treatment

With respect to a taxpayer described in subparagraph (B) of this paragraph—

(i)

there was an erroneous inclusion in, or omission from, gross income,

(ii)

there was an erroneous recognition, or nonrecognition, of gain or loss, or

(iii)

there was an erroneous deduction of an item properly chargeable to capital account or an erroneous charge to capital account of an item properly deductible.

(Aug. 16, 1954, ch. 736, 68A Stat. 338; Pub. L. 85–866, title I, § 59(a), Sept. 2, 1958, 72 Stat. 1647.)

cite as: 26 USC 1312