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property, held by --(A) a taxpayer whose personal efforts created such
property". Section 1253(c) extends the exception to property whose
basis is determined by reference to the basis of such property in the
hands of a taxpayer as described in subparagraph (A) of section
1221(3). We do not agree with petitioner. The legislative history of
section 117(a)(1)(C) of the 1939 Internal Revenue Code, the
predecessor to section 1221(3), states that the exception was intended
to deal with the writing of books and other artistic works in a very
narrow sense. See S. Rept. 2375, 81st Cong., 2d Sess. 43-44 (1950),
1950-2 C.B. 483, 543-544; S. Rept. 91-552, at 198-199 (1969), 1969-3
C.B. 423, 549-550 (discussing the addition of "letters, memorandums,
papers, etc." to section 1221(3) under the Tax Reform Act of 1969,
Pub. L. 91-172, sec. 514(a), 83 Stat. 643); see also Commissioner v.
Ferrer, 304 F.2d 125, 132 (2d Cir. 1962), revg. in part and remanding
35 T.C. 617 (1961). MIC's business records do not fall under the
narrow category of assets described in section 1221(3).
Second, petitioner is deemed to have held the SIC stock for more
than 1 year. Respondent acknowledged that petitioner's transfer of
assets in exchange for the stock of SIC qualified for nonrecognition
under section 351. See supra p. 46. Under sections 1223 and 358,
where a taxpayer has transferred property in a transaction that
qualifies for nonrecognition under section 351, the taxpayer's holding
period in the stock received in the transaction includes the period
for which the taxpayer has held the property transferred in the
transaction. Petitioner's holding period in SIC stock therefore
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