PUBLIC LAW 94-455—OCT. 4, 1976
90 STAT. 1545
proceeds or profits from the film, but only to the extent such interest is attributable to such active participation." (b) ErrECTivE D A T E. — The amendment made by subsection (a) shall 26 USC 543 apply to taxable years ending on or after December 31, 1975. °ot«SEC. 212. BASIS LIMITATION FOR AND RECAPTURE OF DEPRECIATION ON PLAYER CONTRACTS. (a)
BASIS L I M I T A T I O N S. —
(1) IN GENERAL.—Part IV of subchapter O of chapter 1 (relat- 26 USC 1051. ing to special rules applicable to gain or loss on disposition of property) is amended by redesignating section 1056 as section 1057, and by inserting after section 1055 the following new section: "SEC. 1056. BASIS LIMITATION FOR PLAYER CONTRACTS TRANSFERRED 26 USC 1056. IN CONNECTION WITH THE SALE OF A FRANCHISE. " (a) GENERAL RULE. — I f a franchise to conduct any sports enterprise is sold or exchanged, and if, in connection with such sale or exchange, there is a transfer of a contract for the services of an athlete, the basis of such contract in the hands of the transferee shall not exceed the sum of— " (1) the adjusted basis of such contract in the hands of the transferor immediately before the transfer, plus " (2) the gain (if any) recognized by the transferor on the transfer of such contract. For purposes of this section, gain realized by the transferor on the transfer of such contract, but not recognized by reason of section 3 3 7 (a), shall be treated as recognized to the extent recognized by the Post, p. 1772. transferor's shareholders. " (b) EXCEPTIONS.—Subsection (a) shall not apply— " (1) to an exchange described in section 1031 (relating to exchange of property held for productive use or investment), and " (2) to property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent (within the meaning of section 1 0 1 4 (a)). " "(c)
TRANSFEROR REQUIRED To F U R N I S H CERTAIN INFORMATION. —
Under regulations prescribed by the Secretary, the transfer shall, at the times and in the manner provided in such regulations, furnish to the Secretary and to the transferee the following information: " (1) the amount which the transferor believes to be the adjusted basis referred to in paragraph (1) of subsection (a), " (2) the amount which the transferor believes to be the gain referred to in paragraph (2) of subsection (a), and " (3) any subsequent modification of either such amount. To the extent provided in such regulations, the amounts furnished pursuant to the preceding sentence shall be binding on the transferor and on the transferee. "(d)
PRESUMPTION AS TO A M O U N T ALLOCABLE TO PLAYER C O N -
TRACTS.—In the case of any sale or exchange described in subsection (a), it shall be presumed that not more than 50 percent of the consideration is allocable to contracts for the services of athletes unless it is established to the satisfaction of the Secretary that a specified amount in excess of 50 percent is properly allocable to such contracts. Nothing in the preceding sentence shall give rise to a presumption that an allocation of less than 50 percent of the consideration to contracts for the services of athletes is a proper allocation."
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