PUBLIC LAW 91-172-DEC. 30, 1%9
p p. 675,
with respect to the donor, as of the close of such taxable year) as the potential gain on the property received by such donee beai^j to the aggregate potential gain on farm recapture property held by the donor immediately prior to the first of such gifts. "(6) JOINT RETURN.—In the case of an addition to an excess deductions account for a taxable year for which a joint return was filed under section 6013, for any subsequent taxable year for which a separate return was filed the Secretary or his delegate shall provide rules for allocating any remaining amount of such addition in a manner consistent with the purposes of this section. "(c)
68A Stat. 325. 26 USC 1231. o^ T c^ 10,, Tr
ORDINARY INCOME.— "(1) GENERAL RULE.—Except as otherwise provided in this
section, if farm recapture property (as defined in subsection (e)(1)) is disposed of during a taxable year beginning after December 31, 1969, the amount by which— " (A) in the case of a sale, exchange, or involuntary conversion, the amount realized, or " (B) in the case of any other disposition, the fair market value of such property, exceeds the adjusted basis of such property shall be treated as gain from the sale or exchange of property which is neither a capital assct uor property described in section 1231. Such gain shall be recognized notwithstanding any other provision of this subtitle. "(2)
LIMITATION.— " (A) AMOUNT I N
aggregate of the amounts treated under paragraph (1) as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231 for any taxable year shall not exceed the amount in the excess deductions account at the close of the taxable year after applying subsection (b)(3)(A). "(B)
DISPOSITIONS TAKEN INTO ACCOUNT.—If the aggregate
of the amounts to which paragraph (1) applies is limited by the application of subparagraph (A), paragraph (1) shall apply in respect of such dispositions (and in such amounts) as provided under regulations prescribed by the Secretary or his delegate. " (C) SPECIAL RULE FOR DISPOSITIONS OF LAND.—In applying subparagraph (A), any gain on the sale or exchange of land shall be taken into account only to the extent of its potential gain (as defined in subsection (e)(5)). " (d)
68A Stat. 102121; 70 Stat. 402.
68A Stat. 176.
EXCEPTIONS AND SPECIAL RULES.—
" (1) GIFTS.—Subsection (c) shall not apply to a disposition by gift. "(2) TRANSFER AT DEATH.—Except as provided in section 691 (relating to income in respect of a decedent), subsection (c) shall not apply to a transfer at death. "(3) CERTAIN CORPORATE TRANSACTIONS.—If the basis of property in the hands of a transferee is determined by reference to its basis in the hands of the transferor by reason of the application of sections 332, 351, 361, 371(a), or 374(a), then the amount of gain taken into account by the transferor under subsection (c)(1) shall not exceed the amount of gain recognized to the transferor on the transfer of such property (determined without regard to this section). This paragraph shall not apply to a disposition to an organization (other than a cooperative described in section 5^1) which Is excmpt from the tax imposed by this chapter.