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TITLE 26-INTERNAL REVENUE CODE (f) and amending subsec. (a) of this section] shall apply to taxable years beginning after December 31, 1963." EFFECTIVE DATE OF 1962 AMENDMENT Amendment by Pub. L. 87-858 applicable with re- spect to taxable years beginning after Dec. 31, 1961, see section 3(f) of Pub. L. 87-858, set out as an Effec- tive Date of 1962 Amendment note under section 801 of this title. Amendment of subsec. (c)(2)(C) by Pub. L. 87-790 applicable to taxable years beginning after Dec. 31, 1962, see section 3(c) of Pub. L. 87-790, set out as an Effective Date of 1962 Amendment note under section 809 of this title. EFFECTIVE DATE Section applicable only with respect to taxable years beginning after December 31, 1957, see section 4 of Pub. L. 86-69, set out as an Effective Date note under section 801 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 802, 819 6501, 6511, 6601, 6611 of this title. SUBPART E-MISCELLANEOUS PROVISIONS Sec. 817. 818. 819. 819A. 820. Rules relating to certain gains and losses. Accounting provisions. Foreign life insurance companies. Contiguous country branches of domestic life insurance companies. Optional treatment of policies reinsured under modified coinsurance contracts. AMENDMENTS 1976-Pub. L. 94-455, title X, § 1043(b), Oct. 4, 1976, 90 Stat. 1642, added item 819A. § 817. Rules relating to certain gains and losses (a) Treatment of capital gains and losses, etc. In the case of a life insurance company- (1) in applying section 1231(a), the term "property used in the trade or business" shall be treated as including only- (A) property used in carrying on an insur- ance business, of a character which is sub- ject to the allowance for depreciation pro- vided in section 167, held for more than 9 months, and real property used in carrying on an insurance business, held for more than 9 months, which is not described in section 1231(b)(1)(A), (B), or (C), and (B) property described in section 1231(b)(2), and (2) in applying section 1221(2), the refer- ence to property used in trade or business shall be treated as including only property used in carrying on an insurance business, (b) Gain on property held on December 31, 1958, and certain substituted property acquired after 1958 (I) Property held on December 31, 1958 In the case of property held by the taxpay- er on December 31, 1958, if- (A) the fair market value of such property on such date exceeds the adjusted basis for determining gain as of such date, and (B) the taxpayer has been a life insurance company at all times on and after Decem- ber 31, 1958, the gain on the sale or other disposition of such property shall be treated as an amount (not less than zero) equal to the amount by which the gain (determined without regard to this subsection) exceeds the difference be. tween the fair market value on December 31, 1958, and the adjusted basis for determining gain as of such date. (2) Certain property acquired after December 31, 1958 In the case of property acquired after De. cember 31, 1958, and having a substituted basis (within the meaning of section 1016(b))- (A) for purposes of paragraph (1), such property shall be deemed held continuously by the taxpayer since the beginning of the holding period thereof, determined with reference to section 1223, (B) the fair market value and adjusted basis referred to in paragraph (1) shall be that of that property for which the holding period taken into account includes Decem- ber 31, 1958, (C) paragraph (1) shall apply only if the property or properties the holding periods of which are taken into account were held only by life insurance companies after De- cember 31, 1958, during the holding periods so taken into account, (D) the difference between the fair market value and adjusted basis referred to in paragraph (1) shall be reduced (not less than zero) by the excess of (I) the gain that would have been recognized but for this subsection on all prior sales or dispositions after December 31, 1958, of properties re- ferred to in subparagraph (C), over (ii) the gain that was recognized on such sales or other dispositions, and (E) the basis of such property shall be de- termined as if the gain which would have been recognized but for this subsection were recognized gain. (3) Property defined For purposes of paragraphs (1) and (2), the term "property" does not include insurance and annuity contracts (and contracts supple- mentary thereto) and property described in paragraph (1) of section 1221. (Added Pub. L. 86-69, § 2(a), June 25, 1959, 73 Stat. 132, and amended Pub. L. 94-455, title XIV, § 1402(b)(1)(M), title XIX, §§ 1901(a)(100), 1951(b)(11)(A), Oct. 4, 1976, 90 Stat. 1732, 1781, 1839.) TAXABLE YEARS AFTER 1977 Subsec. (a)(1)(A) of this section amended by Pub. L. 94-455, title XIV, § 1402(b)(2), Oct. 4, 1976, 90 Stat. 1732, effective for tax- able years beginning after Dee. 31, 1977, by substituting "1 year"for "9 months". PRIOR PROVISIONS A prior section 817, act Aug. 16, 1954, 'ch. 736, § 817, as added Mar. 13, 1956, ch. 83, § 2, 70 Stat. 46, related to denial of double deductions prior to the general re- vision of this part by Pub. L. 86-69, § 2(a). See section 818(f) of this title. AMENDMENTS 1976-Subsec. (a)(1)(A). Pub. L. 94-455, § 1402(b) (1)(M), provided that "6 months" would be changed to "9 months" for taxable years beginning in 1977. Page 513 §9817