691 



§ 1250. Gain from dispositions of certain depreciable 

 realty. 



(a) Genera! rule. 



Except as otherwise provided In this section — 



(1) Additional depreciation after December 31, 1975. 



(A) In general. — If section 1250 property is 

 disposed of after December 31, 1975, then the ap- 

 plicable percentage of the lower of — 



(i) that portion of the additional deprecia- 

 tion (as defined in subsection (b) (1) or (4) ) 

 attributable to periods after December 31, 1975, 

 in respect of the property, or 



(il) the excess of the amount realized (in 

 the case of a sale, exchange, or involimtary 

 conversion), or the fair market value of such 

 property (in the case of any other disposition) , 

 over the adjusted basis of such property, 

 shall be treated as gain which is ordinary in- 

 come. Such gain shall be recognized notwith- 

 standing any other provision of this subtitle. 



(B) Applicable percentage. — For purposes of 

 subparagraph (A), the term "applicable per- 

 centage" means — 



(i) in the case of section 1250 property with 

 respect to which a mortgage is insured imder 

 section 221(d) (3) or 236 of the National Hous- 

 ing Act, or housing financed or assisted by 

 direct loan or tax abatement imder similar 

 provisions of State or local laws and with re- 

 sr>ect to which the owner is subject to the 

 restrictions described in section 1039(b)(1) 

 (B), 100 piercent minus 1 percentage p)oint for 

 each full month the property was held after 

 the date the property was held 100 full months ; 



(ii) in the case of dwelling units which, on 

 the average, were held for occupancy by fam- 

 ilies or individuals eligible to receive subsidies 

 under section 8 of the United States Housing 

 Act of 1937, as amended, or under the provi- 

 sions of State or local law authorizing similar 

 levels of subsidy for lower-income famiUes, 

 100 percent minus 1 percentage point for each 

 full month the property was held after the 

 date the property was held 100 full months; 



(iii) in the case of section 1250 property 

 with respect to which a depreciation deduc- 

 tion for rehabilitation expenditures was al- 

 lowed under section 167(k) , 100 percent minus 

 1 percentage point for each full month in 

 excess of 100 full months after the date on 

 which such property was placed in service; 



(iv) in the case of section 1250 property 

 with respect to which a loan is made or in- 

 sured under title V of the Housing Act of 

 1949, 100 percent minus 1 percentage point for 

 each full month the property was held after 

 the date the property was held 100 full 

 months; and 



(V) in the case of all other section 1250 



property, 100 percent. 



In the case of a building (or a portion of a 



building devoted to dwelling units), if, on the 



average, 85 percent or more of the dwelling units 



contained in such building (or portion thereof) 

 are units described in clause (ii), such building 

 (or portion thereof) shall be treated as property 

 described in clause (ii) . Clauses (i), (ii), and 

 (iv) shall not apply with respect to the addi- 

 tional depreciation described in subsection (b) 

 (4). 



(2) Additional depreciation after December 31, 1969, 

 and before January 1, 1976. 

 (A) In General. — If section 1250 property is 

 disposed of after December 31, 1969, and the 

 amount determined under paragraph (1) (A) (ii) 

 exceeds the amount determined under para- 

 graph (1) (A) (i) , then tlie applicable percentage 

 of the lower of — 



(i) that portion of the additional deprecia- 

 tion attributable to periods after Decem- 

 ber 31, 1969, and before January 1, 1976, in 

 respect of the property, or 



(11) the excess of the amotmt determined 

 under paragraph (1) (A) (ii) over the amount 

 determined under paragraph (l)(A)(i), 

 shall also be treated as gain which is ordinary 

 income. Such gain shall be recognized notwith- 

 standing any other provision of this subtitle.' 



(B) Applicable percentage. — For purposes of 

 subparagraph (A) , the term "applicable percent- 

 age" means — 



(i) in the case of section 1250 property dis- 

 posed of pursuant to a written contract which 

 was, on July 24, 1969, and at all times there- 

 after, binding on the owner of the property, 

 100 percent minus 1 percentage point for each 

 full month the property was held after the 

 date the property was held 20 full months; 



(il) in the case of section 1250 property with 

 respect to which a mortgage is insiu^ed tmder 

 section 221 (d) (3) or 236 of the National Hous- 

 ing Act, or housing financed or assisted by 

 direct loan or tax abatement under similar 

 provisions of State or local laws, and with re- 

 spect to which the owner is subject to the re- 

 strictions described in section 1039(b)(1)(B). 

 100 percent minus 1 percentage point for each 

 full month the property was held after the 

 date the property was held 20 full months; 



(ill) in the case of residential rental prop- 

 erty (as defined in section 167(j) (2) (B) ) other 

 than that covered by clauses (i) and (ii), 100 

 percent minus 1 percentage point for each 

 full month the property was held after the date 

 the property was held 100 full months; 



(Iv) In the case of section 1250 property 

 with respect to which a depreciation deduction 

 for rehabilitation expenditures was allowed 

 imder section 167(k) , 100 percent minus 1 per- 

 centage point for each full month in excess of 

 100 full months after the date on which such 

 property was placed in service; and 



(V) in the case of all other section 1250 

 property, 100 percent. 

 Clauses (1) , (11) , and (ill) shall not apply with 

 respect to the additional depreciation described 

 in subsection (b) (4) . 



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