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TITLE 26-INTERNAL REVENUE CODE (Aug. 16, 1954, ch. 736, 68A Stat. 301; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(a)(124), 90 Stat. 1784.) REENnzCES IN TEXT The National Bankruptcy Act, as amended (48 Stat. 912), referred to in text, probably means act July 1, 1898, ch. 541, 30 Stat. 544, as amended, known as the Bankruptcy Act, which is classified generally to Title 11, Bankruptcy. Section 77B of the National Bank- ruptcy Act is classified to section 207 of title 11. For complete classification of this Act to the Code, see Tables volume. Section 112(g) of the Internal Revenue Code of 1939, referred to in text, was classified to section 112(g) of former Title 26, Internal Revenue Code. Section 112 was repealed by section 7851(a)(1)(A) of this title. For table of comparisons of the 1939 Code to the 1954 Code, see Table I preceding section 1 of this title. See, also, section 7851(e) of this title for provision that ref- erences in the 1954 Code to a provision of the 1939 Code, not then applicable, shall be deemed a reference to the corresponding provision of the 1954 Code, which is then applicable. A MDmENTs 1976-Pub. L. 94-455 struck out "54 Stat. 709;" before "11 U.S.C. 670". EFFECTxv DATE OF 1976 AMNDMENT Amendment by Pub. L. 94-455 applicable with re- spect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Ef- fective Date of 1976 Amendment note under section 2 of this title. § 1019. Property on which lessee has made improve- ments Neither the basis nor the adjusted basis of any portion of real property shall, in the case of the lessor of such property, be increased or diminished on account of income derived by the lessor in respect of such property and exclud- able from gross income under section 109 (relat- ing to improvements by lessee on lessor's prop- erty). If an amount representing any part of the value of real property attributable to build- ings erected or other improvements made by a lessee in respect of such property was included in gross income of the lessor for any taxable year beginning before January 1, 1942, the basis of each portion of such property shall be properly adjusted for the amount so included in gross income. (Aug. 16, 1954, ch. 736, 68A Stat. 301.) [1020. Repealed. Pub. L. 94-455, title XIX, § 1901(a)(125), Oct. 4, 1976, 90 Stat. 1784] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 302, re- lated to the election to have section 1016(a)(2)(B) of this title apply in respect of periods since Feb. 28, 1913 and before Jan. 1, 1952. § 1021. Sale of annuities In case of the sale of an annuity contract, the adjusted basis shall in no case be less than zero. (Aug. 16, 1954, ch. 736, 68A Stat. 302.) Caoss REFnENcEs Annuities, see section 72 of this title. SECTION REFEuRED TO IN Onum SECTIONS This section is referred to in section 72 of this title. [§1022. Repealed. Pub. L. 94-455, title XIX, § 1901(a)(126)(A), Oct. 4, 1976, 90 Stat. 1784] Section, added Pub. L. 88-272, title II, § 225(j)(1), Feb. 26, 1964, 78 Stp.t. 92, dealt with the increase in basis with respect to certain foreign personal holding company stock or securities, A prior section 1022, act Aug. 16, 1954, ch. 736, 68A Stat. 302, relating to cross references, was renumbered section 1024. EFFECTIVE DATE OF REPEAL Section 1901(a)(126)(B) provided that: "The repeal made by subparagraph (A) [repealing this section] shall apply with respect to stock or securities acquired from a decedent dying after the date of the enactment of this Act [Oct. 4, 1976J." § 1023. Carryover basis for certain property acquired from a decedent dying after December 31, 1976 (a) General rule (1) Carryover basis Except as otherwise provided in this sec- tion, the basis of carryover basis property ac- quired from a decedent dying after December 31, 1976, in the hands of the person so acquir- ing it shall be the adjusted basis of the prnp- erty immediately before the death of the de- cedent, further adjusted as provided in this section. (2) Loss on personal and household effects In the case of any carryover basis property which, in the hands of the decedent, was a personal or household effect, for purposes of determining loss, the basis of such propert, in the hands of the person acquiring such property from the decedent shall not exceed its fair market value. (b) Carryover basis property defined (1) In general For purposes of this section, the term "car- ryover basis property" means any property which is acquired from or pazaed from a dece- dent (within the meaning of section 1014(b)) and which is not excluded pursuant to para- graph (2) or (3). (2) Certain property not carryover basis property The term "carryover basis property" does not include- (A) any item of gross income in respect of a decedent described in section 691; (B) property described in section 2042 (re- lating to proceeds of life insurance); (C) a joint and survivor annuity under which the surviving annuitant is taxable under section 72, and payments and distri- butions under a deferred compensation plan described in part I of subchapter D of chap- ter 1 to the extent such payments and dis- tributions are taxable to the decedent's beneficiary under chapter 1; (D) property included in the decedent's gross estate by reason of section 2035, 2038, or 2041 which has been disposed of before the decedent's death in a transaction in which gain or loss is recognizable for pur- poses of chapter 1; (E) stock or a stock option passing from the decedent to the extent income in re- spect of such stock or stock option is includ- able in gross income under section 422(c)(1), 423(c), or 424(c)(1); and Page 642 § 1019