Treasury Regulations (26 C.F.R.)
26 CFR § 1.1051-1
Basis of property acquired during affiliation.
# (a)
(1) The basis of property acquired by a corporation during a period of affiliation from a corporation with which it was affiliated shall be the same as it would be in the hands of the corporation from which acquired. This rule is applicable if the basis of the property is material in determining tax liability for any year, whether a separate return or a consolidated return is made in respect of such year. For the purpose of this section, the term period of affiliation means the period during which such corporations were affiliated (determined in accordance with the law applicable thereto), but does not include any taxable year beginning on or after January 1, 1922, unless a consolidated return was made, nor any taxable year after the taxable year 1928.
(2) The application of subparagraph (1) of this paragraph may be illustrated by the following example:
Example:
The X Corporation, the Y Corporation, and the Z Corporation were affiliated for the taxable year 1920. During that year the X Corporation transferred assets to the Y Corporation for $120,000 cash, and the Y Corporation in turn transferred the assets during the same year to the Z Corporation for $130,000 cash. The assets were acquired by the X Corporation in 1916 at a cost of $100,000. The basis of the assets in the hands of the Z Corporation is $100,000.
# (b)
The basis of property acquired by a corporation during any period, in the taxable year 1929 or any subsequent taxable year, in respect of which a consolidated return was made or was required under the regulations governing the making of consolidated returns, shall be determined in accordance with such regulations. The basis in the case of property held by a corporation during any period, in the taxable year 1929 or any subsequent taxable year, in respect of which a consolidated return is made or is required under the regulations governing the making of consolidated returns, shall be adjusted in respect of any items relating to such period in accordance with such regulations.
# (c)
Except as otherwise provided in the regulations promulgated under section 1502 of the Internal Revenue Code of 1954 or the regulations under section 141 of the Internal Revenue Code of 1939 or the Revenue Act of 1938 (52 Stat. 447), 1936 (49 Stat. 1652), 1934 (48 Stat. 683), 1932 (47 Stat. 169), or 1928 (45 Stat. 791), the basis of property after a consolidated return period shall be the same as the basis immediately prior to the close of such period.
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In this part (40 sections)
- 1.1033(a)-2 · (a)-2 Involuntary conversion into similar property, into…
- 1.1033(a)-3 · (a)-3 Involuntary conversion of principal residence.
- 1.1033(b)-1 · (b)-1 Basis of property acquired as a result of an…
- 1.1033(c)-1 · (c)-1 Disposition of excess property within irrigation…
- 1.1033(d)-1 · (d)-1 Destruction or disposition of livestock because of…
- 1.1033(e)-1 · (e)-1 Sale or exchange of livestock solely on account of…
- 1.1033(g)-1 · (g)-1 Condemnation of real property held for productive…
- 1.1033(h)-1 · (h)-1 Effective date.
- 1.1035-1 · Certain exchanges of insurance policies.
- 1.1036-1 · Stock for stock of the same corporation.
- 1.1037-1 · Certain exchanges of United States obligations.
- 1.1038-1 · Reacquisitions of real property in satisfaction of…
- 1.1038-2 · Reacquisition and resale of property used as a principal…
- 1.1038-3 · Election to have section 1038 apply for taxable years…
- 1.1039-1 · Certain sales of low-income housing projects.
- 1.1041-1T · Treatment of transfer of property between spouses or…
- 1.1041-2 · Redemptions of stock.
- 1.1042-1T · Questions and answers relating to the sales of stock to…
- 1.1044(a)-1 · (a)-1 Time and manner for making election under the…
- 1.1045-1 · Application to partnerships.
- 1.1051-1 · Basis of property acquired during affiliation.
- 1.1052-1 · Basis of property established by Revenue Act of 1932.
- 1.1052-2 · Basis of property established by Revenue Act of 1934.
- 1.1052-3 · Basis of property established by the Internal Revenue Code…
- 1.1053-1 · Property acquired before March 1, 1913.
- 1.1054-1 · Certain stock of Federal National Mortgage Association.
- 1.1055-1 · General rule with respect to redeemable ground rents.
- 1.1055-2 · Determination of amount realized on the transfer of the…
- 1.1055-3 · Basis of real property held subject to liabilities under a…
- 1.1055-4 · Basis of redeemable ground rent reserved or created in…
- 1.1059(e)-1 · (e)-1 Non-pro rata redemptions.
- 1.1059A-1 · Limitation on taxpayer's basis or inventory cost in…
- 1.1060-1 · Special allocation rules for certain asset acquisitions.
- 1.1061-0 · Table of contents.
- 1.1061-1 · Section 1061 definitions.
- 1.1061-2 · Applicable partnership interests and applicable trades or…
- 1.1061-3 · Exceptions to the definition of an API.
- 1.1061-4 · Section 1061 computations.
- 1.1061-5 · Section 1061(d) transfers to related persons.
- 1.1061-6 · Reporting rules.