9 0 STAT. 1876
PUBLIC LAW 94-455—OCT. 4, 1976 (determined without regard to this subsection) shall be increased by the amount determined under subparagraph (B). " (B) A M O U N T OF INCREASE.—The a m o u n t of the increase
under this subparagraph for any property is the sum of— " (i) the excess referred to in subparagraph (A) ( i i), reduced by an amount equal to all adjustments for depreciation, amortization, or depletion for the holding period of such property, and then multiplied by the applicable fraction determined under subparagraph (C),and " ( i i) the adjustments to basis for depreciation, amortization, or depletion which are attributable to that portion of the holding period for such property which occurs before January 1, 1977. " (C) APPLICABLE PRACTioN.For purposes of subparagraph (B)(i), the term 'applicable fraction' means, with respect to any property, a fraction— " (i) the numerator of which is the number of days in the holding period with respect to such property which occurs before January 1, 1977, and " ( i i) the denominator of which is the total number of days in such holding period. "(D)
26 USC 1016.
"Estate tax."
IMPROVEMENTS.—Under
reflations
prescribed by the Secretary, if there is a substantial improvement of any property, such substantial improvement shall be treated as a separate property for purposes of this paragraph. " (E) DEFINITIONS. — For purposes of this paragraph — " (i) The term 'marketable bond or security' means any security for which, as of December 1976, there was a market on a stock exchange, in an over-the-counter market, or otherwise. " (ii) The term 'holding period' means, w i t h respect to any carryover basis property, the period during which the decedent (or, if any other person held such property immediately before the death of the decedent, such other person) held such property as determined under section 1223; except that such period shall end on the date of the decedent's death, " (i) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section." (3) AMENDMENT o r SECTION 1016.—Section 1016(a) (relating to adjustments to basis) is amended by striking out the period a t the end thereof and by inserting in lieu thereof a semicolon and by adding a t the end thereof the following new paragraph: "(23) to the extent provided in section 1023, relating to carryover basis for certain property acquired from a decedent dying after December 31, 1976." (4)
26 USC 691.
SUBSTANTIAL
AMENDMENTS OF SECTION 6 9 1. —
(A) Section 6 9 1 (c)(2)(A) (relating to deduction for estate tax in case of income in respect of decedents) is amended to read as follows: " (A) The term 'estate tax ' means Federal and State estate taxes (within the meaning of section 1 0 2 3 (f)(3)). " (B) Section 691(c)(2)(C) is amended to read as follows: " (C) The estate tax attributable to such net value shall be an amount which bears the same ratio to the estate tax as such net value bears to the value of the gross estate."
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