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TITLE 26-INTERNAL REVENUE CODE (b) "Holder" defined For purposes of this section, the term "holder" means- (1) any Individual whose efforts created such property, or (2) any other Individual who has acquired his interest in such property in exchange for consideration in money or money's worth paid to such creator prior to actual reduction to practice of the invention covered by the patent, if such individual is neither- (A) the employer of such creator, nor (B) related to such creator (within the meaning of subsection (d)). (c) Effective date This section shall be applicable with regard to any amounts received, or payments made, pur- suant to a transfer described in subsection (a) in any taxable year to which this subtitle ap- plies, regardless of the taxable year in which such transfer occurred. (d) Related persons Subsection (a) shall not apply to any transfer, directly or indirectly, between persons specified within any one of the paragraphs of section 267(b); except that, in applying section 267(b) and (c) for purposes of this section- (1) the phrase "25 percent or more" shall be substituted for the phrase "more than 50 per- cent" each place it appears in section 267(b), and (2) paragraph (4) of section 267(c) shall be treated as providing that the family of an in- dividual shall include only his spouse, ances- tors, and lineal descendants. (e) Cross reference For special rule relating to nonresident aliens, see sec- tion 871(a). (Aug. 16, 1954, ch. 736, 68A Stat. 329; Sept. 2, 1958, Pub, L. 85-866, title I, § 54(a), 72 Stat. 1644; Oct. 4, 1976, Pub. L. 94-455, title XIV, § 1402(b)(1)(V), 90 Stat. 1732.) TAXABLE YEARs ArrT 1977 Subsec. (a) of this section amended by Pub. L. 94-455, title XIV, § 1402(b)(2), Oct. 4, 1976, 90 Stat. 1732, effective with respect to taxable years beginning after Dec. 31, 1977, by substituting "1 year"for "9 months'" AMNME mNTS 1976-Subsec. (a). Pub. L. 94-455 provided that "6 months" would be changed to "9 months" for taxable years beginning in 1977. 1958-Subsec. (d), Pub. L. 85-866 substituted the pro- visions set out as subsec. (d) for provisions reading "Subsection (a) shall not apply to any sale or ex- change between an individual and any other related person (as defined in section 267(b)), except brothers and sisters, whether by the whole or half blood." ErFCIVE DA'rE Or 1976 AimwaTnrr Section 1402(b)(1) of Pub. L. 94-455 provided in part that the substitution of "9 months" for "6 months" in subsec. (a) of this section by section 1402(b)(1)(V) of Pub. L. 94-455 is effective with respect to taxable years beginning in 1977. EmcrIVi- DATE or 1958 Ammmrr Section 54(b) of Pub. L. 85-866 provided that: "The amendment made by subsection (a) (to subsec. d) of this section] shall apply with respect to taxable years ending after the date of the enactment of this Act [Sept. 2, 1958], but only with respect to transfers after such date." CROSS REERENCES Withholding tax on nonresident aliens, see section 1441 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 483, 871, 1441 of this title. § 1236. Dealers In securities (a) Capital gains Gain by a dealer in securities from the sale or exchange of any security shall in no event be considered as gain from the sale or exchange of a capital asset unless- (1) the security was, before the expiration of the 30th day after the date of its acquisi- tion, clearly identified in the dealer's records as a security held for investment or if ac- quired before October 20, 1951, was so identi- fied before November 20, 1951; and (2) the security was not, at any time after the expiration of such 30th day, held by such dealer primarily for sale to customers in the ordinary course of his trade or business. (b) Ordinary losses Loss by a dealer in securities from the sale or exchange of any security shall, except as other- wise provided in section 582(c), (relating to bond, etc., losses of banks), in no event be con- sidered as ordinary loss if at any time after No- vember 19, 1951, the security was clearly Identi- fied in the dealer's records as a security held for investment. (c) Definition of security For purposes of this section, the term "securi- ty" means any share of stock in any corpora- tion, certificate of stock or interest in any cor- poration, note, bond, debenture, or evidence of indebtedness, or any evidence of an interest in or right to subscribe to or purchase any of the foregoing. (Aug. 16, 1954, ch. 736, 68A Stat. 330; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1901(b)(3)(E), 90 Stat. 1793.) AMEnDMENTS 1976-Subsec. (b). Pub. L. 94-455 substituted "ordi- nary loss" for "loss from the sale or exchange of prop. erty which is not a capital asset". Erxcrcva DATE or 1976 AMENDMENT 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. SECTION RFERRIED TO IN OTHER SECTIONS This section is referred to in section 1233 of this title. § 1237. Real property subdivided for sale (a) General Any lot or parcel which is part of a tract of real property in the hands of a taxpayer other than a corporation shall not be deemed to be held primarily for sale to customers in the ordi- nary course of trade or business ut the time of sale solely because of the taxpayer having sub- § 1236 Page 690