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e-CFR data is current as of August 5, 2020

Title 26Chapter ISubchapter APart 1

TITLE 26—Internal Revenue






Determination of Amount of and Recognition of Gain or Loss

Computation of gain or loss.
Discharge of liabilities.
Modifications of debt instruments.
Modifications of certain derivative contracts.
European Monetary Union (conversion to the euro).
Sales or exchanges.

Basis Rules of General Application

Adjusted basis.
Bargain sale to a charitable organization.
Basis of property.
Transfers in part a sale and in part a gift.
Property included in inventory.
Basis of property acquired from a decedent.
Property acquired from a decedent.
Other basis rules.
Uniformity of basis; adjustment to basis.
Gain or loss.
Special rule for adjustments to basis where property is acquired from a decedent prior to his death.
Example applying rules of §§1.1014-4 through 1.1014-6 to case involving multiple interests.
Bequest, devise, or inheritance of a remainder interest.
Special rule with respect to DISC stock.
Basis of property acquired by gift after December 31, 1920.
Transfer of property in trust after December 31, 1920.
Gift or transfer in trust before January 1, 1921.
Transfers in part a gift and in part a sale.
Increased basis for gift tax paid.
Adjustments to basis; scope of section.
Items properly chargeable to capital account.
Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913.
Exhaustion, wear and tear, obsolescence, amortization, and depletion; periods during which income was not subject to tax.
Miscellaneous adjustments to basis.
Other applicable rules.
Substituted basis.
Basis reductions following a discharge of indebtedness.
Property on which lessee has made improvements.
Election as to amounts allowed in respect of depreciation, etc., before 1952.
Sale of annuities.

Common Nontaxable Exchanges

Table of contents.
Property held for productive use in trade or business or for investment.
Additional rules for exchanges of personal property.
Receipt of other property or money in tax-free exchange.
Safe harbor for qualified intermediaries.
Nonrecognition of loss.
Property acquired upon a tax-free exchange.
Coordination of section 1060 with section 1031 (temporary).
Treatment of assumption of liabilities.
Exchange of livestock of different sexes.
Exchanges of multiple properties.
Treatment of deferred exchanges.
Disposition by a corporation of its own capital stock.
Disposition by a corporation of stock of a controlling corporation in certain triangular reorganizations.
Disposition of stock or stock options in certain transactions not qualifying under any other nonrecognition provision.
Involuntary conversions; nonrecognition of gain.
Involuntary conversion into similar property, into money or into dissimilar property.
Involuntary conversion of principal residence.
Basis of property acquired as a result of an involuntary conversion.
Disposition of excess property within irrigation project deemed to be involuntary conversion.
Destruction or disposition of livestock because of disease.
Sale or exchange of livestock solely on account of drought.
Condemnation of real property held for productive use in trade or business or for investment.
Effective date.
Certain exchanges of insurance policies.
Stock for stock of the same corporation.
Certain exchanges of United States obligations.
Reacquisitions of real property in satisfaction of indebtedness.
Reacquisition and resale of property used as a principal residence.
Election to have section 1038 apply for taxable years beginning after December 31, 1957.
Certain sales of low-income housing projects.
Treatment of transfer of property between spouses or incident to divorce (temporary).
Redemptions of stock.
Questions and answers relating to the sales of stock to employee stock ownership plans or certain cooperatives (temporary).
Time and manner for making election under the Omnibus Budget Reconciliation Act of 1993.
Application to partnerships.

Special Rules

Basis of property acquired during affiliation.
Basis of property established by Revenue Act of 1932.
Basis of property established by Revenue Act of 1934.
Basis of property established by the Internal Revenue Code of 1939.
Property acquired before March 1, 1913.
Certain stock of Federal National Mortgage Association.
General rule with respect to redeemable ground rents.
Determination of amount realized on the transfer of the right to hold real property subject to liabilities under a redeemable ground rent.
Basis of real property held subject to liabilities under a redeemable ground rent.
Basis of redeemable ground rent reserved or created in connection with transfers of real property before April 11, 1963.
Non-pro rata redemptions.
Limitation on taxpayer's basis or inventory cost in property imported from related persons.
Special allocation rules for certain asset acquisitions.

Changes To Effectuate F.C.C. Policy

Gain from sale or exchange to effectuate policies of Federal Communications Commission.
Nature and effect of election.
Reduction of basis of property pursuant to election under section 1071.
Manner of election.

Exchanges in Obedience to S.E.C. Orders

Terms used.
Purpose and scope of exception.
Exchanges of stock or securities solely for stock or securities.
Exchanges of property for property by corporations.
Distribution solely of stock or securities.
Transfers within system group.
Sale of stock or securities received upon exchange by members of system group.
Exchanges in which money or other nonexempt property is received.
Requirements with respect to order of Securities and Exchange Commission.
Nonapplication of other provisions of the Internal Revenue Code of 1954.
Records to be kept and information to be filed with returns.
Basis for determining gain or loss.
Basis of property acquired upon exchanges under section 1081 (a) or (e).
Reduction of basis of property by reason of gain not recognized under section 1081(b).
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.
Basis of property acquired by shareholder upon tax-free distribution under section 1081(c) (1) or (2).
Basis of property acquired under section 1081(d) in transactions between corporations of the same system group.

Wash Sales of Stock or Securities

Losses from wash sales of stock or securities.
Basis of stock or securities acquired in “wash sales”.
Coordination of loss deferral rules and wash sale rules (temporary).
Treatment of holding periods and losses with respect to straddle positions (temporary).
Mixed straddles; straddle-by-straddle identification under section 1092(b)(2)(A)(i)(I) (Temporary).
Mixed straddles; mixed straddle account (temporary).
Definitions (temporary).
Mixed straddles; accrued gain and loss associated with a position that becomes part of a section 1092(b)(2) identified mixed straddle that is established after August 18, 2014.
Qualified covered calls.
Equity options with flexible terms.
Qualifying over-the-counter options.
Definitions and special rules.
Personal property.
Alternative tax.
Table of contents.
Deduction for capital gains.
Qualified small business stock; effect of redemptions.

Treatment of Capital Losses

Limitation on capital losses.
Capital loss carryovers and carrybacks.

General Rules for Determining Capital Gains and Losses

Meaning of terms.
Hedging transactions.
Time and manner for electing capital asset treatment for certain self-created musical works.
Other terms relating to capital gains and losses.
Determination of period for which capital assets are held.
Rules relating to the holding periods of partnership interests.

Special Rules for Determining Capital Gains and Losses

Gains and losses from the sale or exchange of certain property used in the trade or business.
Livestock held for draft, breeding, dairy, or sporting purposes.
Bonds and other evidences of indebtedness; scope of section.
Gain upon sale or exchange of obligations issued at a discount after December 31, 1954.
Inclusion as interest of original issue discount on certain obligations issued after May 27, 1969.
Gains and losses from short sales.
Hedging transactions.
Options to buy or sell.
Special rule for grantors of straddles applicable to certain options granted on or before September 1, 1976.
Special rules for the treatment of grantors of certain options granted after September 1, 1976.
Hedging transactions.
Sale or exchange of patents.
Definition of terms.
Dealers in securities.
Real property subdivided for sale.
Amortization in excess of depreciation.
Gain from sale or exchange of depreciable property between certain related taxpayers after October 4, 1976.
Gain from sale or exchange of depreciable property between certain related taxpayers on or before October 4, 1976.
Capital gains treatment of certain termination payments.
Cancellation of lease or distributor's agreement.
Losses on small business investment company stock.
Loss of small business investment company.
Loss on small business stock treated as ordinary loss.
Annual limitation.
Section 1244 stock defined.
Small business corporation defined.
Contributions of property having basis in excess of value.
Increases in basis of section 1244 stock.
Stock dividend, recapitalizations, changes in name, etc.
Net operating loss deduction.
Records to be kept.
General rule for treatment of gain from dispositions of certain depreciable property.
Definition of recomputed basis.
Definition of section 1245 property.
Exceptions and limitations.
Adjustments to basis.
Relation of section 1245 to other sections.
Treatment of gain from certain sales or exchanges of stock in certain foreign corporations.
Earnings and profits attributable to a block of stock in simple cases.
Earnings and profits attributable to stock in complex cases.
Limitation on tax applicable to individuals.
Stock ownership requirements for less developed country corporations.
Sale or exchange of stock in certain domestic corporations.
Taxpayer to establish earnings and profits and foreign taxes.
Earnings and profits attributable to stock following certain non-recognition transactions.
Certain nonrecognition distributions.
Exceptions for certain distributions and attribution rules.
Reasonable cause and effective/applicability dates.
Gain from certain sales or exchanges of patents, etc., to foreign corporations.
Gain from dispositions of certain depreciable realty.
Additional depreciation defined.
Exceptions and limitations.
Holding period.
Property with two or more elements.
General rule for treatment of gain from disposition of property used in farming where farm losses offset nonfarm income.
Excess deductions account.
Definitions relating to section 1251.
Exceptions and limitations.
General rule for treatment of gain from disposition of farm land.
Special rules.
Table of contents for section 1254 recapture rules.
Treatment of gain from disposition of natural resource recapture property.
Exceptions and limitations.
Section 1254 costs immediately after certain acquisitions.
Special rules for S corporations and their shareholders.
Special rules for partnerships and their partners.
Effective/applicability date.
Identification of hedging transactions.
Netting rule for certain conversion transactions.
Original issue discount; effective date; table of contents.
Special rules applicable to amounts received on retirement, sale, or exchange of debt instruments.
Current inclusion of OID in income.
Treatment of debt instruments purchased at a premium.
Election by a holder to treat all interest on a debt instrument as OID.
Definition of OID.
Determination of issue price and issue date.
Debt instruments to which section 1274 applies.
Issue price of debt instruments to which section 1274 applies.
Potentially abusive situations defined.
Test rate.
Special rules for certain transactions where stated principal amount does not exceed $2,800,000.
Special rules relating to debt instruments.
OID information reporting requirements.
Contingent payment debt instruments.
Variable rate debt instruments.
Integration of qualifying debt instruments.
Inflation-indexed debt instruments.
Tax treatment of certain stripped bonds and stripped coupons.
Stripped inflation-protected debt instruments.
Denial of capital gains treatment for gains on registration-required obligations not in registered form.
Adjustment of applicable Federal rate for tax-exempt obligations.
Treatment of shareholders of certain passive foreign investment companies; table of contents.
Taxation of U.S. persons that are shareholders of section 1291 funds.
Deemed dividend election.
Deemed sale election.
Table of contents.
Current taxation of income from qualified electing funds.
Table of contents.
Election to extend the time for payment of tax on undistributed earnings of a qualified electing fund (temporary).
Table of contents.
Qualified electing funds.
Retroactive elections.
Mark to market election for marketable stock.
Definition of marketable stock.
Table of contents.
Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a section 1297(e) PFIC.
Passive foreign investment company—table of contents.
Section 1298(f) annual reporting requirements for United States persons that are shareholders of a passive foreign investment company.
Deemed sale or deemed dividend election by a U.S. person that is a shareholder of a former PFIC.

Income Averaging

Averaging of farm and fishing income.

Readjustment of Tax Between Years and Special Limitations

Purpose and scope of section 1311.
Maintenance of an inconsistent position.
Correction not barred at time of erroneous action.
Existence of relationship in case of adjustment by way of deficiency assessment.
Double inclusion of an item of gross income.
Double allowance of a deduction or credit.
Double exclusion of an item of gross income.
Double disallowance of a deduction or credit.
Correlative deductions and inclusions for trusts or estates and legatees, beneficiaries, or heirs.
Correlative deductions and credits for certain related corporations.
Basis of property after erroneous treatment of a prior transaction.
Law applicable in determination of error.
Decision by Tax Court or other court as a determination.
Closing agreement as a determination.
Final disposition of claim for refund as a determination.
Agreement pursuant to section 1313(a)(4) as a determination.
Related taxpayer.
Ascertainment of amount of adjustment in year of error.
Adjustment to other barred taxable years.
Method of adjustment.
Adjustment unaffected by other items.

Involuntary Liquidation and Replacement of Lifo Inventories

Involuntary liquidation of lifo inventories.
Liquidation and replacement of lifo inventories by acquiring corporations.

War Loss Recoveries

Recoveries in respect of war losses.
Inclusion in gross income of war loss recoveries.
Tax adjustment measured by prior benefits.
Restoration of value of investments.
Elective method; time and manner of making election and effect thereof.
Basis of recovered property.
Determination of tax benefits from allowable deductions.

Claim of Right

Restoration of amounts received or accrued under claim of right.
Computation of tax where taxpayer recovers substantial amount held by another under claim of right; effective date.

Other Limitations

Recovery of unconstitutional taxes.
Tax on certain amounts received from the United States.
Fifty-percent maximum tax on earned income.
Computation of the fifty-percent maximum tax on earned income.

Small Business Corporations and Their Shareholders

Table of contents.
S corporation defined.
Definitions relating to S corporation subsidiaries.
QSub election.
Effect of QSub election.
Termination of QSub election.
Effective date.
Table of contents.
Election to be an S corporation.
Termination of election.
Treatment of S termination year.
Inadvertent terminations and inadvertently invalid elections.
Election after termination.
Elections and consents.
Effective dates.
Dividends received from affiliated subsidiaries.
Effect of election on corporation.
Recapture of LIFO benefits.
Table of contents.
Shareholder's share of items of an S corporation.
Limitations on deduction of passthrough items of an S corporation to its shareholders.
Treatment of family groups.
Special rules limiting the passthrough of certain items of an S corporation to its shareholders.
Effective/applicability date.
Table of contents.
Adjustments to basis of shareholder's stock in an S corporation.
Adjustments to basis of indebtedness to shareholder.
Effective/Applicability date.
Table of contents.
Distributions by S corporations.
Accumulated adjustments account (AAA).
Effective date and transition rule.
Table of contents.
General rules and definitions.
Net recognized built-in gain.
Net unrealized built-in gain.
Recognized built-in gain or loss.
Loss carryforwards.
Credits and credit carryforwards.
Section 1374(d)(8) transactions.
Anti-stuffing rule.
Effective date and additional rules.
Tax imposed when passive investment income of corporation having subchapter C earnings and profits exceed 25 percent of gross receipts.
Table of contents.
Pro rata share.
Post-termination transition period.
Effective dates.
Taxable year of S corporation.

Section 1374 Before the Tax Reform Act of 1986

Tax imposed on certain capital gains.

Cooperatives and Their Patrons

Organizations to which part applies.
Tax on certain farmers' cooperatives.
Taxable income of cooperatives; gross income.
Taxable income of cooperatives; treatment of patronage dividends.
Taxable income of cooperatives; special deductions for exempt farmers' cooperatives.
Taxable income of cooperatives; payment period for each taxable year.
Taxable income of cooperatives; products marketed under pooling arrangements.
Taxable income of cooperatives; treatment of earnings received after patronage occurred.
Special rules applicable to cooperative associations exempt from tax before January 1, 1952.
Computation of tax where cooperative redeems nonqualified written notices of allocation.

Tax Treatment by Patrons of Patronage Dividends

Amounts includible in patron's gross income.

Definitions; Special Rules

Definitions and special rules.
Table of contents.
Enterprise zone facility bonds.

Empowerment Zone Employment Credit

Qualified zone employees.
Qualified zone academy bonds.

Rules Relating to Individuals' Title 11 Cases

Treatment of passive activity losses and passive activity credits in individuals' title 11 cases.
Treatment of section 465 losses in individuals' title 11 cases.
Treatment of section 121 exclusion in individuals' title 11 cases.
Additional first year depreciation deduction for qualified New York Liberty Zone property.
Table of Contents.
Deferring tax on capital gains by investing in opportunity zones.
Inclusion of gains that have been deferred under section 1400Z-2(a).
Investments held for at least 10 years.
Qualified opportunity funds and qualified opportunity zone businesses.
Qualified opportunity zone business property.
Administrative rules- penalties, anti-abuse, etc.

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