26 USC 1255 - Gain from disposition of section 126 property

U.S Code last checked for updates: Nov 22, 2024

§ 1255.

Gain from disposition of section 126 property

(a)

General rule

(1)

Ordinary income

Except as otherwise provided in this section, if section 126 property is disposed of, the lower of—

(A)

the applicable percentage of the aggregate payments, with respect to such property, excluded from gross income under section 126, or

(B)

the excess of—

(i)

the amount realized (in the case of a sale, exchange, or involuntary conversion), or the fair market value of such section 126 property (in the case of any other disposition), over

(ii)

the adjusted basis of such property,

shall be treated as ordinary income. Such gain shall be recognized notwithstanding any other provision of this subtitle, except that this section shall not apply to the extent such gain is recognized as ordinary income under any other provision of this part.

(2)

Section 126 property

(3)

Applicable percentage

(b)

Special rules

Under regulations prescribed by the Secretary—

(1)

rules similar to the rules applicable under section 1245 shall be applied for purposes of this section, and

(2)

for purposes of sections 170(e) and 751(c), amounts treated as ordinary income under this section shall be treated in the same manner as amounts treated as ordinary income under section 1245.

(Added Pub. L. 95–600, title V, § 543(c)(1), Nov. 6, 1978, 92 Stat. 2890; amended Pub. L. 96–222, title I, § 105(a)(7)(B), (D), Apr. 1, 1980, 94 Stat. 221; Pub. L. 96–471, § 2(b)(6), Oct. 19, 1980, 94 Stat. 2254; Pub. L. 99–514, title V, § 511(d)(2)(A), title VI, § 631(e)(14), Oct. 22, 1986, 100 Stat. 2248, 2275; Pub. L. 100–647, title I, § 1005(c)(10), Nov. 10, 1988, 102 Stat. 3392; Pub. L. 108–27, title III, § 302(e)(4)(B)(ii), May 28, 2003, 117 Stat. 764; Pub. L. 115–141, div. U, title IV, § 401(a)(175), Mar. 23, 2018, 132 Stat. 1192.)

cite as: 26 USC 1255