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TITLE 26-INTERNAL REVENUE CODE May 10, 1934, ch. 277, 48 Stat. 680. Section 112(g) of such act appears on page 705. Section 113(a)(23) of the Internal Revenue Code of 1939, referred to in par. (5), was classified to section 113(a)(23) of former Title 26. Internal Revenue Code. Section 113 was repealed by section 7851(a)(1) of this title.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 references 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. The Internal Revenue Code of 1939, referred to in par. (9), is act Feb. 10, 1939, ch. 2, 53 Stat. 1, as amend- ed. Prior to the enactment of the Internal Revenue Code of 1954, the 1939 Code was classified to former Title 26, Internal Revenue Code. For table of compari- sons of the 1939 Code to the 1954 Code, see Table I preceding section 1 of this title. AMENmENTS 1976-Par. (5). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Par. (11). Pub. L. 94-455, § 1402(b)(1)(Q), provided that "6 months" would be changed to "9 months" for taxable years beginning in 1977. 1970-Par. (11). Pub. L. 91-614 added par. (11). Former par. (11) redesignated (12). Par. (12). Pub. L. 91-614 redesignated former par. (1) as (12). 1982-Pub. L. 87-834 added par. (10) and redesignat. ed former par. (10) as (11). En'xcTivE DATE OF 1976 AMmiMsENr Section 1402(b)(1) of Pub. L. 94-455 provided in part that the substitution of "9 months" for "6 months" in par. (11) of this section by section 1402(b)(1)(Q) of Pub. L. 94-455 is effective with respect to taxable years beginning in 1977. EFFECTIVE DATE OF 1970 AwMNDMENT Amendment by Pub. L. 91-614 applicable with re- spect to decedents dying after Dec. 31, 1970, see sec- tion 101(J) of Pub. L. 91-614, set out as an Effective Date of 1970 Amendment note under section 2032 of this title. EFFECTIVE DATE OF 1062 AMENMEmT Par. (10) applicable with respect to taxable years be- ginning after Dec. 31, 1902, see section 14(c) of Pub. L. 87-834. set out as an Effective Date note under section 1246 of this title. CRoss RERENcEs Short-term gains and holding periods, see section 1233 of this title. SECTION RMMUUn TO IN OTHER SECTIONS This section is referred to in sections 246, 341, 735, 1034, 1233, 1246, 1250 of this title. PART IV-SPECIAL RULES FOR DETER- MINING CAPITAL GAINS AND LOSSES Sec. 1231. 1232. 1233. 1234. 1235. 1236. 1237. 1238. 1239. [1240. 1241. Property used in the trade or business and involuntary conversions. Bonds and other evidences of indebtedness. Gains and losses from short sales. Options to buy or sell. Sale or exchange of patents. Dealers in securities. Real property subdivided for sale. Amortization in excess of depreciation. Gain from sale of depreciable property be- tween certain related taxpayers. Repealed.] Cancellation of lease or distributor's agree- ment. Sec. 1242. Losses on small business investment compa- ny stock. 1243. Loss of small business investment company. 1244. Losses on small business stock. 1245. Gain from dispositions of certain depreciable property. 1246. Gain on foreign investment company stock. 127. . Election by foreign investment companies to distribute income currently. 1248. Gain from certain sales or exchanges of stock in certain foreign corporations. 1249, Gain from certain sales or exchanges of pat- ents, etc., to foreign corporations. 1250. Gain from dispositions of certain depreciable realty. 1251, Gain from disposition of property used in farming where farm losses offset nonfarm income. 1252. Gain from the disposition of farm land.' 1253. Transfers of franchises, trademarks, and trade names. 1254. Gain from disposition of interest in oil or gas property. AmENDMENTS 1976-Pub. L. 94-455, title II, § 205(d), title XIX, § 1901(b)(34), Oct. 4, 1976. 90 Stat, 1535, 1802 added item 1254 and struck out item 1240 "Taxability to em- ployee of termination payments". 1969-Pub. L. 91-172, title II, §§211(b)(7), 214(b), title V, § 516(c)(2)(C), Dec. 30, 1969, 83 Stat. 570, 573, 648, added items 1251 to 1253. 1964-Pub. L. 88-272, title II. §231(b)(7), Feb. 26, 1964, 78 Stat. 105, added item 1250. 1962-Pub. L. 87-834, §§13(a)(2), 14(a)(2), 15(b), 16(b), Oct. 16, 1962, 76 Stat. 1033, 1040, 1044, 1045, added items 1245-1249. 1958-Pub. L. 85-866, title I, § 57(c)(3), title II, § 202 (c), Sept. 2, 1958, 72 Stat. 1646, 1678, added items 1242- 1244, § 1231. Property used in the trade or business and in- voluntary conversions (a) General rule If, during the taxable year, the recognized gains on sales or exchanges of property used in the trade or business, plus the recognized gains from the compulsory or involuntary conversion (as a result of destruction in whole or in part, theft or seizure, or an exercise of the power of requisition or condemnation or the threat or imminence thereof) of property used in the trade or business and capital assets held for more than 9 months into other property or money, exceed the recognized losses from such sales, exchanges, and conversions, such gains and losses shall be considered as gains and losses from sales or exchanges of capital assets held for more than 9 months. If such gains do not exceed such losses, such gains and losses shall not be considered as gains and losses from sales or exchanges of capital assets. For pur- poses of this subsection- (1) in determining under this subsection whether gains exceed losses, the gains de- scribed therein shall be included only if and to the extent taken into account in comput- ing gross income and the losses described therein shall be included only if and to the extent taken into account in computing tax- able income, except that section 1211 shall not apply; and (2) losses (including losses not compensated for by insurance or otherwise) upon the de- 'So in original. Does not conform to section catch- line. Page 682 §1231