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TITLE 26-INTERNAL REVENUE CODE sonal holding company stock or securities", added Item 1023. and redesignated former item 1023 as 1024. 1964-Pub. L. 88-272, title II, §225(j)(3), Feb. 26, 1964, 78 Stat. 93, added Item 1022, and redesignated former item 1022 as 1023. CROSS RMWEaRCzS Basis of transferee partner's interest, see section 742 of this title. PART REFERRED TO IN OTHER SECTIONS This part is referred to in section 742 of this title. § 1011. Adjusted basis for determining gain or loss (a) General rule The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under section 1012 or other appli- cable sections of this subchapter and sub- chapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses)), adjusted as provided in section 1016. (b) Bargain sale to a charitable organization If a deduction is allowable under section 170 (relating to charitable contributions) by reason of a sale, then the adjusted basis for determin- ing the gain from such sale shall be that por- tion of the adjusted ba.-'s which bears the same ratio to the adjusted basis as the amount real- ized bears to the fair market value of the prop- erty. (Aug. 16, 1954, ch. 736, 68A Stat. 296; Dec. 30, 1969, Pub. L. 91-172, title II, § 201(f), 83 Stat. 564.) 1969-Pub. L. 91-172 redesignated existing provisions as subsec. (a) and added subsec. (b). EFFECTivE DATE OF 1969 AmfmENr Amendment by Pub. L. 91-172 applicable with re- spect to sales made after Dec. 19, 1969, see section 201(g)(6) of Pub. L. 91-172, set out as an Effective Date of 1969 Amendment note under section 170 of this title. CROSS REFERmcm Bad debt deduction determined by reference to ad- justed basis provided in this section, see section 166 of this title. Basis for determining gain or loss on new vessel ac- quired in exchange for obsolete vessel under Merchant Marine Act, section 1101 et seq. of Title 46, see section 1160 of Title 46, Shipping. Computation of gain or loss by reference to adjusted basis provided in this section, see section 1001 of this title. Cost depletion basis as the adjusted basis provided in this section, see section 612 of this title. Depreciation basis as the adjusted basis provided in this section, see section 167 of this title. Loss deduction determined by reference to adjusted basis provided in this section, see section 165 of this title. SECTION RF'ED TO IN OTHER SECTIONS This section is referred to in sections 165, 166, 612, 1001 of this title. § 1012. Basis of property-cost The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapter C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses). The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164(d) as imposed on the taxpayer. (Aug. 16, 1954, ch. 736, 68A Stat. 296.) Caoss RErxNczs Involuntary conversions, see section 1033 of this title. SECTION RzniMMU TO IN OTHER SECTIONS This section is referred to in sections 1011, 1033, 1039 of this title. § 1013, Basis of property included in inventory If the property should have been included in the last inventory, the basis shall be the last in- ventory value thereof. (Aug. 16, 1954, ch. 736, 68A Stat. 296.) Caoss Rumnnicms Capital assets as rot including property includible in inventory if on hand at close of taxable year, see sec- tion 1221 of this title. Character of gain or loss on disposition by distribu- tee partner of inventory items, see section 735 of this title. General rules for inventories, see section 471 of this title. Inventory carryovers, see section 381 of this title. LIFO inventories, generally, see section 472 cf this title, Property includible within inventories as not proper- ty used in trade or business, see section 1231 of this title. Taxability of corporation on distribution of inven- tories, see section 311 of this title. § 1014. Basis of property acquired from a decedent (a) In general Except as otherwise provided in this section, the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise dis- posed of before the decedent's death by such person, be the fair market value of the proper- ty at the date of the decedent's death, or, in the case of an election under either section 2032 or section 811(j) of the Internal Revenue Code of 1939 where the decedent died after October 21, 1942, its value at the applicable valuation date prescribed by those sections. (b) Property acquired from the decedent For purposes of subsection (a), the following property shall be considered to have been ac- quired from or to have passed from the dece- dent: (1) Property acquired by bequest, devise, or inheritance, or by the decedent's estate from the decedent; (2) Property transferred by the decedent during his lifetime in trust to pay the income for life to or on the order or direction of the decedent, with the right reserved to the dece- dent at all times before his death to revoke the trust; (3) In the case of decedents dying after De- cember 31, 1951, property transferred by the § 1011 Page 634