840 53 Stat. 40. 26U. .C.§113(a) (2). 63 Stat. 41 . 26U.S.C.§113(a) (3) 53 Stat. 41. 26U.S. C.. 113 (a) (5). 53 Stat. 122 . 26U.S.C.§811(j). 53 Stat. 45. 26U.S.C. 114(b) (4). 53 Stat. 14 . 26U.. C. §23(m). PUBLIC LAWS-CH. 619-OCT. 21 , 1942 [56 STAT. (d) TAXABLE YEARS TO WHICH APPLICABLE.- The amendments made by this section shall be applicable to taxable years beginning after December 31, 1939. SEC. 143. BASIS OF GIFTS. (a) GIFTS AFTER DECEMBER 31, 1920.-T he first sentence of section 113 (a) (2) is amended to read as follows: "If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period prior to the date of the gift as provided in subsection (b)) is greater than the fair market value of the prop- erty at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value." (b) TRANSFERS IN TRUST AFTER DECEMBER 31, 1920. - Section 113 (a) (3) is amended to read as follows: "(3) TRANSFER IN TRUST AFTER DECEMBER 31, 1920.- If the property was acquired after December 31, 1920, by a transfer in trust (other than by a transfer in trust by a gift, 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 applicable to the year in which the transfer was made." SEC. 144. BASIS OF PROPERTY IN CASE OF OPTIONAL VALUE FOR ESTATE TAX PURPOSES. (a) BASIS OF PROPERTY.- Section 113 (a) (5) (relating to basis of property transmitted at death) is amended by adding at the end thereof the following new sentence: "In the case of an election made by the executor under section 811 (j), the time of acquisition of the property shall, for the purpose of this paragraph, be the applicable valuation date of the property prescribed by such section in deter- mining the value of the gross estate." (b) PROPERTY TO WHICH AMENDMENT APPLICABLE. -The amend- ment made by this section shall be applicable only with respect to property includible in the gross estate of a decedent dying after the date of the enactment of this Act. SEC. 145. PERCENTAGE DEPLETION FOR COAL, FLUORSPAR, BALL AND SAGGER CLAY, ROCK ASPHALT, AND METAL MINES AND SULPHUR. (a) PERCENTAGE DEPLETION. -Section 114 (b) (4) is amended to read as follows: "(4) PERCENTAGE DEPLETION FOR COAL, FLUORSPAR, BALL AND SAGGER CLAY, ROCK ASPHALT, AND METAL MINES AND SULPHUR.- The allowance for depletion under section 23 (m) shall be, in the case of coal mines, 5 per centum, in the case of metal mines, fluorspar, ball and sagger clay or rock asphalt mines, 15 per centum, and, in the case of sulphur mines or deposits, 23 per centum, of the gross income from the property during the tax- able year, excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. Such allowance shall not exceed 50 per centum of the net income of the taxpayer (computed without allowance for depletion) from the property, except that in no case shall the depletion allowance under section 23 (m) be less than it would be if computed without reference to this paragraph."
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