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TITLE 26-INTERNAL REVENUE CODE "shall be treated as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. Such gain shall be recog- nized notwithstanding any other provision of this sub- title."; redesignated as subpar. (B) existing subpar. (C); substituted therein introdue-tory "subparagraph (A)" for "paragraph (1)"; and deleted from cl. (1i) "constructed, reconstructed, or acquired by the tax- payer before January 1, 1976," following "section 1250 property" and "is" preceding "financed", and substi- tuted "1" for "one". (4) Made the following changes in par. (3): substitut- ed in subpar. (A) "determined under paragraph (1)(A)(ii) exceeds the sum of the amounts determined under paragraphs (1)(A)(i) and (2)(A)(i)" for "deter- mined under paragraph (1)(B) exceeds the amount de- termined under pargraph (1)(A)"; and substituted subpar. (A)(ii) and concluding text for par. (2)(A)(ii), and concluding text which read: "(ii) the excess of the amount determined under paragraph (1)(B) over the amount determined under paragraph (1)(A), "shall also be treated as gain from the sale or ex- change of property which is neither a capital asset nor property described in section 1231. Such gain shall be recognized notwithstanding any other provisions of this subtitle." Subsec. (b)(3). Pub. L. 94-455, §§ 1951(c)(2)(C), 2122(b)(4), 2124(a)(3)(D), inserted parenthetical text "(as in effect before its repeal by the Tax Reform Act of 1976)" following "section 168" and reference to sec- tions 190 and 191. Subsec. (d)C4)(B). Pub. L. 94-455, § 1901(b)(31)(A), substituted reference to section "1033(a)(2)(A)" for "1033(a)(3)(A)". Subsec. (d)(4)(C). Pub. L. 94-455, § 1901(b)(31)(B), substituted reference to section "1033(a)(2)" for "1033(a)(3)". Subsec. (d)(4)(D). Pub. L. 94-455, § 1901(b)(31)(B), (E), substituted reference to sections "1033(a)(2)" and "1033(b)" for "1033(a)(3)" and "1033(c)" § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d)(5), (8)(F)(ii). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". Subsec. (d)(10). Pub. L. 94-455, § 202(b), added par. (10). Subsec. (f)(1). Pub. L. 94-455, § 1901(b)(3)(K). substi- tuted "ordinary income" for "gain from the sale or ex- change of property which is neither a capital asset nor property described in section 1231". Subsec. (f)(2). Pub. L. 94-455, § 202(c)(1), substituted introductory text "the sum of a series of amounts de- termined for the periods set forth in subsection (a), with the amount for any such period being determined by multiplying" for "the sum of-A) the amount (if any) determined by multiplying"; substituted subpar. (A) as combined text for prior subpars. (A)(i) and (B)(i) reading "(I) the amount which bears the same ratio to the lower of the amounts specified in subpara- graph (A) or (B) of subsection' (a)(1) for the section 1250 property as the additional depreciation for such element attributablle to periods after December 31, 1969, bears to the sum of the additional depreciation for all elements attributable to periods after Decem- ber 31, 1969, by" and "(I) the amount which bears the same ratio to the lower of the amounts specified in subsection (a)(2)(A)(i) or (ii) for the section 1250 prop- erty as the additional depreciation for such element attributable to periods before January 1, 1970, bears to the sum of the additional depreciation for all elements attributable to periods before January 1, 1970, by"; and substituted subpar. (B) as combined text for prior subpars. (A)(i) and (B)(ii), inserting therein "for such period" following "for such element". Subsec. (g)(1). Pub. L. 94-455, § 1901(b)(3)(K), substi- tuted "ordinary income" for "gain from the sale or ex- change of property which is neither a capital asset nor property described in section 1231". Subsec. (g)(2). Pub. L. 94-455, § 202(c)(2), substituted "shall be determined in a manner similar to that pro- vided by subsection (f)(2)." for "shall be the amount determined by multiplying- "(A) the amount which bears the same ratio to the lower of the additional depreciation or the gain rec- ognized for the sectioa 1250 property disposed of as the additional depreciation for such element bears to the sum of the add(itional depreciation for all ele- ments disposed of, by "(B) the applicable percentage for such element. For purposes of this p)aragraph, determinations with respect to any elemer,t shall be made as if it were a separate property." Subsec. (h). Pub. L 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". 1975-Subsec. (a)(1)(C)(ii). Pub. L. 93-625 substitut- ed "January 1, 1976" for "January 1, 1975". Subsec. (d). Pub. L. 94-81, § 2(b), added reference to par. (9) in par. (3), and added par. (9). 1971-Subsec. (b)(3). Pub. L. 92-178 included refer- ence to section 188. 1969-Subsec. (a). Pub. L. 91-172, § 521(b), modified the recapture rules pertaining to residential housing by allowing a 1 percent per month reduction in the amount to be recaptured as ordinary income after the property has been held for 100 full months, with other real property remaining subject to full recapture, ap- plied the existing recapture rules where the sale of property was subject to a binding contract in existence prior to July 25, 1969, provided that changes in the re- capture rules are not to apply in federally assisted pro- Jects (such as programs under section 221(d)(3) or 236 of the National Housing Act) or to other publicly as- sisted housing programs under which the return to the investor is limited on a comparable basis, thereby rendering these projects subject to a recapture of the depreciation in full if the sale occurs in the first 12 months and for a phaseout of the recapture of the excess of accelerated over straight-line depreciation after 20 months, the recapture being reduced at the rate of 1 percent per month until 120 months after which no recapture applies, with such recapture rules to continue to apply only with respect to such proper- ty constructed, reconstructed, or acquired before Jan. 1, 1975, and applied new recapture rules to depreci- ation attributable to periods after Dec. 31, 1969. Subsec. (b). Pub. L. 91-172, § 512(c), added par. (4). Subsec. (b)(3). Pub. L. 91-172, §704(b)(5), inserted reference to sections 169 and 185 of this title. Subsec. (d). Pub. L. 91-172, §§521(e)(1), 910(b)(1), substituted "subsection (a)" for "subsection (a)(1)" wherever it appears and added par. (8). Subsec. (e). Pub. L. 91-172, § 910(b)(2), added par. (4). Subsec. (f)(1). Pub. L. 91-172, § 521(e)(2)(A), substi- tuted "subsection (a)" for "subsection (a)(1)". Subsec. (f)(2). Pub. L. 91-172. § 521(e)(2)(B), redesig- nated subpars. (A) and (B) as cls. (i) and (ii) of subpar. (A), respectively, and, in such cis. (I) and (if) as so re- designated, added reference to depreciation attribut- able to periods after Dec. 31, 1969, and added subpar. (B). Subsec. (g). Pub. L. 91-172, § 910(b)(3), added subsec. (g). Former subsec. (g) redesignated (h). Subsec. (h). Pub. L. 91-172, § 910(b)(3), redesignated former subsec. (g) as (h). Former subsec. (h) redesig- nated (i). Subsec. (i). Pub. L. 91-172, § 910(b)(3), redesignated former subsec. (h) as (i). EFrrcTiVE DATE OF 1976 AMENDMENT Section 202(d) of Pub. L. 94-455 provided that: "The amendments made by this section (other than subsec- tion (b)) [to subsecs. (a), (f)(2) and (g)(2) of this sec- tion and section 167(e)(3) of this title] shall apply for taxable years ending after December 31, 1975, The amendment made by subsection (b) (to subsec. (d)(10) of this section] shall apply with respect to proceedings (and to operations of law) referred to in section 1250(d)(10) of the Internal Revenue Code of 1954 [to Page 711 § 1250