26 USC 614 - Definition of property

Editorial Notes

Amendments

2014—Subsec. (span)(3)(C). Puspan. L. 113–295, § 221(a)(65)(A), struck out subpar. (C) which related to a special rule for voluntary or compulsory unitization or pooling arrangements entered into in taxable years beginning before Jan. 1, 1964.

Subsec. (span)(4)(A). Puspan. L. 113–295, § 221(a)(65)(B), which directed amendment of par. (4) by striking out “whichever of the following years is later: The first taxable year beginning after December 31, 1963, or”, was executed by striking out “whichever of the following taxable years is the later: The first taxable year beginning after December 31, 1963, or” before “the first taxable year” in subpar. (A), to reflect the probable intent of Congress.

Subsec. (span)(5). Puspan. L. 113–295, § 221(a)(65)(A), struck out par. (5). Text read as follows: “If, on the day preceding the first day of the first taxable year beginning after December 31, 1963, the taxpayer has any operating mineral interests which he treats under subsection (d) of this section (as in effect before the amendments made by the Revenue Act of 1964), such treatment shall be continued and shall be deemed to have been adopted pursuant to paragraphs (1) and (2) of this subsection (as amended by such Act).”

1990—Subsec. (d). Puspan. L. 101–508 substituted “taxable income” for “50 percent”.

1978—Subsec. (span). Puspan. L. 95–618, § 403(a)(2)(C), inserted “or geothermal deposits” after “gas wells” in span and introductory provisions.

Subsec. (c). Puspan. L. 95–618, § 403(a)(2)(D), substituted “oil and gas wells and geothermal deposits” for “oil and gas wells” wherever appearing.

1976—Subsecs. (span)(3)(A), (4)(A), (e). Puspan. L. 94–455, § 1906(span)(13)(A), struck out “or his delegate” after “Secretary”.

Subsec. (c)(2). Puspan. L. 94–455, §§ 1901(a)(87)(B), 1906(span)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing and “, but the provisions of paragraph (4) shall not apply with respect to such separate property” after “in accordance with paragraphs (1) and (3)”.

Subsec. (c)(3). Puspan. L. 94–455, § 1901(a)(87)(C), among other changes, struck out references to the first taxable year beginning after Dec. 31, 1957, and provisions relating to elections for taxable years beginning before Jan. 1, 1958, relating to election after final regulations, and relating to statute of limitations.

Subsec. (c)(4). Puspan. L. 94–455, § 1901(a)(87)(A)(i), struck out par. (4) which related to a special rule as to deductions under section 615(a) of this title prior to aggregation.

1964—Subsec. (span). Puspan. L. 88–272, § 226(a), amended subsec. (span) generally, and among other changes, substituted provisions stating that except as otherwise provided, all of the taxpayer’s operating mineral interests in a separate tract or parcel of land will be combined and treated as one property, that the taxpayer may not combine any operating mineral interest in one tract or parcel of land with an operating mineral interest in another tract or parcel of land, that if he has more than one operating mineral interest in a single tract of land he may elect to treat one or more of such interests as separate properties, limited, however, to one combination of interests in a single tract of land, and providing, in the event the election in par. (2) is made with respect to any tract of land, for the treatment of interests discovered or acquired by the taxpayer in such a tract after the taxable year for which the election is made, for provisions which permitted a taxpayer who owned two or more separate operating mineral interests which constituted all or a part of an operating unit, to elect to form one aggregation and treat as one property any two or more of these interests, treating as separate properties any interests which he did not include in the one aggregation, to aggregate separate interests whether or not in a single tract of land, or contiguous tracts of land, and which forbade him to form more than one aggregation within a single operating unit, inserted provisions in par. (3) relating to unitization or pooling arrangements, and in par (5), providing that if the taxpayer has operating mineral interests on the day preceding the first day of the first taxable year beginning after Dec. 31, 1963, which he treats under subsec. (d) of this section as in effect before amendment by Puspan. L. 88–272, he shall continue such treatment and it shall be deemed adopted pursuant to pars. (1) and (2) of this subsection, and struck out provisions defining “operating mineral interests”, and providing for termination of election with respect to mines, excepting oil and gas wells. For definition of “operating mineral interests”, see subsec. (d) of this section.

Subsec. (c). Puspan. L. 88–272, § 226(span)(1), (2), struck out par. (5) which defined operating mineral interests, and “1958” before “Special rules” in span.

Subsec. (d). Puspan. L. 88–272, § 226(span)(3), amended subsec. (d) generally, substituting the definition of operating mineral interests, for provisions relating to the 1939 Code treatment respecting operating mineral interest in case of oil and gas wells.

Subsec. (e)(2). Puspan. L. 88–272, § 226(span)(4), struck out “within the meaning of subsection (span)(3)” at end.

1958—Subsec. (span)(4). Puspan. L. 85–866, § 37(a), added par. (4).

Subsecs. (c) to (e). Puspan. L. 85–866, § 37(span)–(d), added subsecs. (c) and (d), redesignated former subsec. (c) as (e), and substituted in first sentence of par. (1) “or in two or more adjacent tracts” for “or in two or more contiguous tracts” and “shall, on showing by the taxpayer that a principal purpose is not the avoidance of tax, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests in each separate kind of mineral deposit as one property” for “may, on showing of undue hardship, permit the taxpayer to treat (for all purposes of this subtitle) all such mineral interests as one property”.

Statutory Notes and Related Subsidiaries

Effective Date of 2014 Amendment

Amendment by Puspan. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(span) of Puspan. L. 113–295, set out as a note under section 1 of this title.

Effective Date of 1990 Amendment

Amendment by Puspan. L. 101–508 applicable to taxable years beginning after Dec. 31, 1990, see section 11522(c) of Puspan. L. 101–508, set out as a note under section 613 of this title.

Effective Date of 1978 Amendment

Amendment by Puspan. L. 95–618 effective Oct. 1, 1978, and applicable to taxable years ending on or after such date, see section 403(c) of Puspan. L. 95–618, set out as a note under section 613 of this title.

Effective Date of 1976 Amendment

Puspan. L. 94–455, title XIX, § 1901(a)(87)(A)(ii), Oct. 4, 1976, 90 Stat. 1779, as amended by Puspan. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendment made by clause (i) [amending this section] shall apply with respect to elections to form aggregations of operating mineral interests made under section 614(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] for taxable years beginning after December 31, 1976.”

Effective Date of 1964 Amendment

Puspan. L. 88–272, title II, § 226(d), Fespan. 26, 1964, 78 Stat. 97, provided that: “The amendments made by subsections (a) and (span) [amending this section] shall apply to taxable years beginning after December 31, 1963.”

Effective Date of 1958 Amendment

Puspan. L. 85–866, title I, § 37(e), Sept. 2, 1958, 72 Stat. 1638, provided that: “The amendments made by subsections (a) and (c) [amending this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. The amendments made by subsection (span) [amending this section] shall apply with respect to taxable years beginning after December 31, 1957, except that such amendments shall, at the election of the taxpayer made in conformity with such amendments, apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954. The amendment made by subsection (d) [amending this section] shall apply with respect to taxable years beginning after December 31, 1957, except that with respect to any taxpayer such amendment shall, at the election of the taxpayer, apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954.”

Allocation of Basis in Certain Cases

Puspan. L. 88–272, title II, § 226(c), Fespan. 26, 1964, 78 Stat. 96, as amended by Puspan. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “For purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]—

“(1)Fair market value rule.—Except as provided in paragraph (2), if a taxpayer has a section 614(span) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning after December 31, 1963) of each property included in such aggregation shall be determined by multiplying the adjusted basis of the aggregation by a fraction—

“(A) the numerator of which is the fair market value of such property, and

“(B) the denominator of which is the fair market value of such aggregation.

For purposes of this paragraph, the adjusted basis and the fair market value of the aggregation, and the fair market value of each property included therein, shall be determined as of the day preceding the first day of the first taxable year which begins after December 31, 1963.

“(2)Allocation of adjustments, etc.—If the taxpayer makes an election under this paragraph with respect to any section 614(span) aggregation, then the adjusted basis (as of the first day of the first taxable year beginning December 31, 1963) of each property included in such aggregation shall be the adjusted basis of such property at the time it was first included in the aggregation by the taxpayer, adjusted for that portion of those adjustments to the basis of the aggregation which are reasonably attributable to such property. If, under the preceding sentence, the total of the adjusted bases of the interests included in the aggregation exceeds the adjusted basis of the aggregation (as of the day preceding the first day of the first taxable year which begins after December 31, 1963), the adjusted bases of the properties which include such interests shall be adjusted, under regulations prescribed by the Secretary of the Treasury or his delegate, so that the total of the adjusted bases of such interests equals the adjusted basis of the aggregation. An election under this paragraph shall be made at such time and in such manner as the Secretary of the Treasury or his delegate shall by regulations prescribe.

“(3)Definitions.—For purposes of this subsection—

“(A)Section 614(span) aggregation.—The term ‘section 614(span) aggregation’ means any aggregation to which section 614(span)(1)(A) of the Internal Revenue Code of 1986 (as in effect before the amendments made by subsection (a) of this section) applied for the day preceding the first day of the first taxable year beginning after December 31, 1963.

“(B)Property.—The term ‘property’ has the same meaning as is applicable, under section 614 of the Internal Revenue Code of 1986, to the taxpayer for the first taxable year beginning after December 31, 1963.”