[Code of Federal Regulations]
[Title 26, Volume 2]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.84-1]

[Page 345-346]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.84-1  Transfer of appreciated property to political organizations.

    (a) Transfer defined. A transfer after May 7, 1974, of property to a 
political organization (as defined in section 527(e)(1), and including a 
newsletter fund to the extent provided under section 527(g)) is treated 
as a sale of the property to the political organization if the fair 
market value of the property exceeds its adjusted basis. The transferor 
is treated as having realized an amount equal to the fair market value 
of the property on the date of the transfer. For purposes of this 
section, a transfer is any assignment, conveyance, or delivery of 
property other than a bona fide sale for an adequate and full 
consideration in money or money's worth, whether the transfer is in 
trust or otherwise, whether the transfer is direct or indirect and 
whether the property is real or personal, tangible or intangible. Thus, 
for example, a sale at less than fair market value (other than an 
ordinary trade discount), or a receipt of property by a political 
organization under an agency agreement entitling the organization to 
sell the property and retain all or a portion of the proceeds of the 
sale, is a transfer within the meaning, of this section. The term 
``transfer'' also includes an illegal contribution of property.
    (b) Amount realized. A transferor to whom this section applies 
realizes an amount equal to the fair market value of the property on the 
date of the transfer. For purposes of this section, the definition of 
fair market value set forth in Sec. 1.170A-1(c) (2) and (3) is 
incorporated by reference.
    (c) Amount recognized. A transferor to whom this section applies is 
treated as having sold the property to the political organization on the 
date of the transfer. Therefore, the rules of chapter 1 of subtitle A 
(relating to income tax) apply to the gain realized under this section 
as if this gain were an

[[Page 346]]

amount realized upon the sale of the property. These rules include those 
of section 55 and section 56 (relating to minimum tax for tax 
preference), section 306 (relating to disposition of certain stock), 
section 1201 (relating to the alternative tax on certain capital gains), 
section 1245 (relating to gain from dispositions of certain depreciable 
property), and section 1250 (relating to gain from dispositions of 
certain depreciable realty).
    (d) Holding period. The holding period of property transferred to a 
political organization to which this section applies begins on the day 
after the date of acquisition of the property by the political 
organization.

[T.D. 7671, 45 FR 8003, Feb. 6, 1980]