Treasury Regulations (26 C.F.R.)
26 CFR § 1.1019-1
Property on which lessee has made improvements.
In any case in which a lessee of real property has erected buildings or made other improvements upon the leased property and the lease is terminated by forfeiture or otherwise resulting in the realization by such lessor of income which, were it not for the provisions of section 109, would be includible in gross income of the lessor, the amount so excluded from gross income shall not be taken into account in determining the basis or the adjusted basis of such property or any portion thereof in the hands of the lessor. If, however, in any taxable year beginning before January 1, 1942, there has been included in the gross income of the lessor an amount representing any part of the value of such property attributable to such buildings or improvements, the basis of each portion of such property shall be properly adjusted for the amount so included in gross income. For example, A leased in 1930 to B for a period of 25 years unimproved real property and in accordance with the terms of the lease B erected a building on the property. It was estimated that upon expiration of the lease the building would have a depreciated value of $50,000, which value the lessor elected to report (beginning in 1931) as income over the term of the lease. This method of reporting was used until 1942. In 1952 B forfeits the lease. The amount of $22,000 reported as income by A during the years 1931 to 1941, inclusive, shall be added to the basis of the property represented by the improvements in the hands of A. If in such case A did not report during the period of the lease any income attributable to the value of the building erected by the lessee and the lease was forfeited in 1940 when the building was worth $75,000, such amount, having been included in gross income under the law applicable to that year, is added to the basis of the property represented by the improvements in the hands of A. As to treatment of such property for the purposes of capital gains and losses, see subchapter P (section 1201 and following), chapter 1 of the Code.
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In this part (40 sections)
- 1.1014-4 · Uniformity of basis; adjustment to basis.
- 1.1014-5 · Gain or loss.
- 1.1014-6 · Special rule for adjustments to basis where property is…
- 1.1014-7 · Example applying rules of §§ 1.1014-4 through 1.1014-6 to…
- 1.1014-8 · Bequest, devise, or inheritance of a remainder interest.
- 1.1014-9 · Special rule with respect to DISC stock.
- 1.1014-10 · Basis of property acquired from a decedent must be…
- 1.1015-1 · Basis of property acquired by gift after December 31, 1920.
- 1.1015-2 · Transfer of property in trust after December 31, 1920.
- 1.1015-3 · Gift or transfer in trust before January 1, 1921.
- 1.1015-4 · Transfers in part a gift and in part a sale.
- 1.1015-5 · Increased basis for gift tax paid.
- 1.1016-1 · Adjustments to basis; scope of section.
- 1.1016-2 · Items properly chargeable to capital account.
- 1.1016-3 · Exhaustion, wear and tear, obsolescence, amortization, and…
- 1.1016-4 · Exhaustion, wear and tear, obsolescence, amortization, and…
- 1.1016-5 · Miscellaneous adjustments to basis.
- 1.1016-6 · Other applicable rules.
- 1.1016-10 · Substituted basis.
- 1.1017-1 · Basis reductions following a discharge of indebtedness.
- 1.1019-1 · Property on which lessee has made improvements.
- 1.1020-1 · Election as to amounts allowed in respect of depreciation,…
- 1.1021-1 · Sale of annuities.
- 1.1031-0 · Table of contents.
- 1.1031(a)-1 · (a)-1 Property held for productive use in trade or…
- 1.1031(a)-2 · (a)-2 Additional rules for exchanges of personal property.
- 1.1031(a)-3 · (a)-3 Definition of real property.
- 1.1031(b)-1 · (b)-1 Receipt of other property or money in tax-free…
- 1.1031(b)-2 · (b)-2 Safe harbor for qualified intermediaries.
- 1.1031(c)-1 · (c)-1 Nonrecognition of loss.
- 1.1031(d)-1 · (d)-1 Property acquired upon a tax-free exchange.
- 1.1031(d)-1T · (d)-1T Coordination of section 1060 with section 1031…
- 1.1031(d)-2 · (d)-2 Treatment of assumption of liabilities.
- 1.1031(e)-1 · (e)-1 Exchange of livestock of different sexes.
- 1.1031(j)-1 · (j)-1 Exchanges of multiple properties.
- 1.1031(k)-1 · (k)-1 Treatment of deferred exchanges.
- 1.1032-1 · Disposition by a corporation of its own capital stock.
- 1.1032-2 · Disposition by a corporation of stock of a controlling…
- 1.1032-3 · Disposition of stock or stock options in certain…
- 1.1033(a)-1 · (a)-1 Involuntary conversions; nonrecognition of gain.