PRIA, Government Policy, Made Personal

Summary

Figure gain or loss from selling or otherwise giving up property by using its adjusted basis. Start with the property's original tax basis (set by the tax rules) and then apply the changes required under section 1016. If you sell at a bargain to a charity and get a deduction under section 170, only a portion of that adjusted basis counts for the gain. That portion equals (amount you actually received) divided by (the property's fair market value), times your adjusted basis.

Title 26, §1011

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule

The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other applicable sections of this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016.

(b)Bargain sale to a charitable organization

If a deduction is allowable under section 170 (relating to charitable contributions) by reason of a sale, then the adjusted basis for determining the gain from such sale shall be that portion of the adjusted basis which bears the same ratio to the adjusted basis as the amount realized bears to the fair market value of the property.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1969—Pub. L. 91–172 redesignated existing provisions as subsec. (a) and added subsec. (b).

Statutory Notes and Related Subsidiaries

Effective Date

of 1969 AmendmentAmendment by Pub. L. 91–172 applicable with respect to sales made after Dec. 19, 1969, see section 201(g)(6) of Pub. L. 91–172, set out as a note under section 170 of this title.

§1011 Adjusted Basis for Determining Gain or Loss