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74 TH C ONGRESS . SESS. II. CH. 690. JUNE 22, 1936 . A dju sted basis for SEC. 113. AD JUS TED BAS IS FOR DET ERM ININ G GAIN OR LOSS . determining ga in or loss . Cost value ; exce p- (a) BA SIS (UNADJUSTED) OF PROPERTY .-The ba sis of pro per ty tions .
shall be the cost of such property ; except that- Inventory value .
(1) IN VENTOR Y VALUE .-I f the property should ha ve beeiin included in the last inventory, the basis shall be the last inventory value thereof. Gifts after December
(2) GI FTS AFTER DECEMBER 31, 1920 .-If the property was 31, 1920 .
acquired by gi ft after December 31, 1920, th e basis shall be the same as it would be in the hands of the donor or the last preceding Determination of owner by whom it was not acquired by gift, except that for the loss . purpose of determining loss the basis shall be the basis so deter- mined or the fair market value of the property at the time of the gift, whichever is lower . If the facts necessary to determine the basis in the hands of the donor or the last preceding owner are unknown to the donee, the Commissioner shall, if possible, obtain such facts from such donor or last preceding owner, or any other Fair market value . person cognizant thereof . If the Commissioner finds it impossible to obtain such facts, the basis in the hands of such donor or last preceding owner shall be the fair market value of such property as found by the Commissioner as of the date or approximate date at which, according to the best information that the Commissioner is able to obtain , such property was acquired b y such donor or last preceding owner . Transfer in trust
(3) TRANSFER IN TRUST AFTER DECEMBER 31, 1920 .-If the prop- 920r. December 31, erty was acquired after December 31, 1920, by a transfer in trust (other than by a transfer in trust by a bequest or devise) the basis shall be the same as it would be in the hands of the grantor, increased in the amount of gain or decreased in the amount of loss recognized to the grantor upon such transfer under the law appli- cable to the year in which the transfer was made . trust Gift before o transfer January 1, in
(4) GIFT OR TRANSFER IN TRUST BEFORE JANUARY 1, 1921 .-If the 1921. property was acquired by gift or transfer in trust on or before December 31, 1920, the basis shall be the fair market value of such property at the time of such acquisition . ted at death . Propeetransmit-
(5) PROPERTY TRANSMITTED AT DEATH .-If the property was acquired by bequest, devise, or inheritance, or by the decedent's estate from the decedent, the basis shall be the fair market value Tr ansf er in trust wi th right to revoke. of such property at the time of such acquisition . In the case of property transferred in trust to pay the income for life to or upon the order or direction of the grantor, with the right reserved to the grantor at all times prior to his death to revoke the trust, the basis of such property in the hands of the persons entitled under the terms of the trust instrument to the property after the grant- or's death shall, after such death, be the same as if the trust instrument had been a will executed on the day of the grantor's eration without under gene ra full general de ath . For the pu rpose of th is par agraph prope rty p assing with- pow er power of a ppointment . out full and adequ ate consideration under a general power of appointment exerci sed by will shall be deemed to be proper ty passing from the individual exercising such power by bequest or devise . Ac qui red on ex-
(6) TA X-FREE EXCHAN GES GE NERALL Y .- If the proper ty was change, etc . acquired, after February 28, 1913, upon an exchange described ro nte,-1pG8. 1678-1681 ; in section 112 (b) to (e), inclusive, the basis (except as provided in paragraph (15) of this subsection) shall be the same as in the case of the property exchanged, decreased in the amount of any money received by the taxpayer and increased in the amount of gain or decreased in the amount of lo ss to the taxpayer that was recognized upon such exchange under the law applicable to the
