26Title 26The US tax code, read & explained

26 U.S.C. § 1223

§ 1223. Holding period of property

965 words · amended 16 times · cited by 12 other sections

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No plain-English explainer yet. Below is the official text. Explainers are being added section by section.

History

Part of the code since 1954. Last changed March 23, 2018 by the Consolidated Appropriations Act, 2018.

Every change, newest first (17)
  1. March 23, 2018Consolidated Appropriations Act, 2018
  2. December 19, 2014Tax Increase Prevention Act of 2014
  3. December 21, 2005Gulf Opportunity Zone Act of 2005
  4. October 22, 2004American Jobs Creation Act of 2004
  5. December 21, 2000Public Law 106-554
  6. July 22, 1998IRS Restructuring and Reform Act of 1998
  7. August 5, 1997Taxpayer Relief Act of 1997
  8. November 30, 1989Public Law 101-194
  9. November 10, 1988Technical and Miscellaneous Revenue Act of 1988
  10. July 18, 1984Deficit Reduction Act of 1984
  11. January 12, 1983Public Law 97-448
  12. April 2, 1980Public Law 96-223
  13. November 6, 1978Revenue Act of 1978
  14. October 4, 1976Tax Reform Act of 1976
  15. December 31, 1970Public Law 91-614
  16. October 16, 1962Public Law 87-834
  17. August 16, 1954Internal Revenue Code of 1954 (original text)

The law as written

Current through Public Law 119-102. Amendment notes omitted.

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 loss 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 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 the acquisition of which (or the contract or option to acquire which) resulted in the nondeductibility (under section 1091 relating to wash sales) of the loss from the sale or other disposition of substantially identical stock or securities, there shall be included the period for which he held the stock or securities the loss from the sale or other disposition of which was not deductible.

(4)

In determining the period for which the taxpayer has held stock or rights to acquire stock received on a distribution, if the basis of such stock or rights is determined under section 307, there shall (under regulations prescribed by the Secretary) be included the period for which he held the stock in the distributing corporation before the receipt of such stock or rights upon such distribution.

(5)

In determining the period for which the taxpayer has held stock or securities acquired from a corporation by the exercise of rights to acquire such stock or securities, there shall be included only the period beginning with the date on which the right to acquire was exercised.

[(6) repealed

Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(80)(C), Dec. 19, 2014, 128 Stat. 4049.]

(7)

In determining the period for which the taxpayer has held a commodity acquired in satisfaction of a commodity futures contract (other than a commodity futures contract to which section 1256 applies) there shall be included the period for which he held the commodity futures contract if such commodity futures contract was a capital asset in his hands.

[(8) repealed

Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(80)(C), Dec. 19, 2014, 128 Stat. 4049.]

(9)

In the case of a person acquiring property from a decedent or to whom property passed from a decedent (within the meaning of section 1014(b)), if—

(A)

the basis of such property in the hands of such person is determined under section 1014, and

(B)

such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death,

then such person shall be considered to have held such property for more than 1 year.

(10)

If—

(A)

property is acquired by any person in a transfer to which section 1040 applies,

(B)

such property is sold or otherwise disposed of by such person within 1 year after the decedent’s death, and

(C)

such sale or disposition is to a person who is a qualified heir (as defined in section 2032A(e)(1)) with respect to the decedent,

then the person making such sale or other disposition shall be considered to have held such property for more than 1 year.

(11)

In determining the period for which the taxpayer has held qualified replacement property (within the meaning of section 1042(b)) the acquisition of which resulted under section 1042 in the nonrecognition of any part of the gain realized on the sale of qualified securities (within the meaning of section 1042(b)), there shall be included the period for which such qualified securities had been held by the taxpayer.

(12)

In determining the period for which the taxpayer has held property the acquisition of which resulted under section 1043 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property had been held as of the date of such sale.

(13)

Except for purposes of subsections (a)(2) and (c)(2)(A) of section 1202, in determining the period for which the taxpayer has held property the acquisition of which resulted under section 1045 or 1397B in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which such other property has been held as of the date of such sale.

(14)

If the security to which a securities futures contract (as defined in section 1234B) relates (other than a contract to which section 1256 applies) is acquired in satisfaction of such contract, in determining the period for which the taxpayer has held such security, there shall be included the period for which the taxpayer held such contract if such contract was a capital asset in the hands of the taxpayer.

(15) Cross reference.—

For special holding period provision relating to certain partnership distributions, see section 735(b).