[Code of Federal Regulations]
[Title 26, Volume 11]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.1082-1]

[Page 198-199]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.1082-1  Basis for determining gain or loss.

    (a) For determining the basis of property acquired in a taxable year 
beginning before January 1, 1942, in any

[[Page 199]]

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 Sec. 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 
Sec. 1.1081-2.