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section 10166 (i.e., the regular adjusted cost basis), for
purposes of determining gain or loss. Section 1011 does not
specify any alternative basis rules besides those contained in
other sections of subchapters C, K, O, and P of the Code, which
are not applicable to the instant cases.
DEFRA section 177(d)(2), which has not been codified, is not
specifically referenced in section 1011. Nevertheless, DEFRA
section 177(d)(2)(A) specifically provides the rules for
determining adjusted basis in property held on January 1, 1985,
when determining petitioner’s gain on the sale or other
disposition of such property. Thus, as to petitioner, the
specific basis rules contained in DEFRA section 177(d)(2)(A)
replace the regular adjusted cost basis rules contained in
sections 1011 through 1023 of the Code. Since section 167(g)
requires that the adjusted basis for determining gain be used as
the adjusted basis for amortizing intangibles, it is logical to
conclude that petitioner must use the specific adjusted basis
determined under DEFRA section 177(d)(2)(A)(ii) to amortize any
intangibles it might have held on January 1, 1985.
6Sec. 1016 provides adjustments to basis; e.g., for
expenditures, receipts, losses, or other items, properly
chargeable to capital account and for exhaustion, wear and tear,
obsolescence, amortization, and depletion to the extent of the
amount allowed (but not less than the amount allowable) as
deductions in computing taxable income. Sec. 1016(a)(1) and (2).
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