CH. 1—NORMAL TAXES AND SURTAXES
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(i) the sum of the gains from sales or exchanges of capital assets, plus taxable income (computed without regard to the e deductions provided by section 151, relating to personal exemptions or any deduction in heu thereof) of the taxpayer or $1,000, whichever is smaller, over [ (ii) the losses from such sales or exchanges. c For purposes of this subparagraph, taxable income shall be •J computed without regard to gains or losses from sales or exchanges i of capital assets. If the taxpayer elects to pay the optional tax under section 3, the term "taxable income" as used in this t) subparagraph shall be read as "adjusted gross income." Ii (10) N E T CAPITAL LOSS.—The term "net capital loss" means the excess of the losses from sales or exchanges of capital assets over f the sum allowed under section 1211. For the purpose of determining 1 losses under this paragraph, amounts which are short-term capital losses under section 1212 shall be excluded. SEC. 1223. HOLDING PERIOD OF PROPERTY. For purposes of this subtitle— •^ (1) In determining the period for which the taxpayer has held •' property received in an exchange, there shall be included the ' period for which he held the property exchanged if, under this ^ chapter, the property has, for the purpose of determining gain or ^ logs from a sale or exchange, the same basis in whole or in part " in his hands as the property exchanged, and, in the case of such '^ exchanges after March 1, 1954, the property exchanged at the time of such exchange was a capital asset as defined in section 1221 or property described in section 1231. For purposes of this paragraph— ,^ (A) an involuntary conversion described in section 1033 shall '^ be considered an exchange of the property converted for the property acquired, and ^' (B) a distribution to which section 355 (or so much of section "' 356 as relates to section 355) applies shall be treated as an exchange. (2) In determining the period for which the taxpayer has held property however acquired there shall be included the period for • which such property was held by any other person, if under this chapter such property has, for the purpose of determining gain or loss from a sale or exchange, the same basis in whole or in part in his hands as it would have in the hands of such other person. (3) In determining the period for which the taxpayer has held stock or securities received upon a distribution where no gain was recognized to the distributee under section 1081(c) (or under section 112(g) of the Revenue Act of 1928, 45 Stat. 818, or the Revenue Act of 1932, 48 Stat. 705), there shall be included the period for which he held the stock or securities in the distributing corporation before the receipt of the stock or securities on such distribution. (4) In determining the period for which the taxpayer has held stock or securities the acquisition of which (or the contract or option
§ 1223(4)
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