26 U.S.C. § 1249 — Gain from certain sales or exchanges of

Page 2356 TITLE 26—INTERNAL REVENUE CODE § 1249 EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94–455, title X, § 1022(b), Oct. 4, 1976, 90 Stat. 1619, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to tax- able years beginning after December 31, 1975.’’ For effective date of amendment by section 1042 of Pub. L. 94–455, see section 1042(e) of Pub. L. 94–455, set out as a note under section 367 of this title. Pub. L. 94–455, title XIV, § 1402(b)(1), Oct. 4, 1976, 90 Stat. 1731, provided that the amendment made by that section is effective with respect to taxable years begin- ning in 1977. Pub. L. 94–455, title XIV, § 1402(b)(2), Oct. 4, 1976, 90 Stat. 1732, provided that the amendment made by that section is effective with respect to taxable years begin- ning after Dec. 31, 1977. Amendment by section 1901(b)(3)(H), (32)(B)(iii) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89–809 applicable with respect to sales or exchanges occurring after Dec. 31, 1966, see section 104(n) of Pub. L. 89–809, set out as a note under section 11 of this title. EFFECTIVE DATE Pub. L. 87–834, § 15(c), Oct. 16, 1962, 76 Stat. 1044, pro- vided that: ‘‘The amendments made by this section [en- acting this section] shall apply with respect to sales or exchanges occurring after December 31, 1962.’’ PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989 For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title. TRANSITIONAL RULE Pub. L. 99–514, title XVIII, § 1875(g)(3), Oct. 22, 1986, 100 Stat. 2897, provided that: ‘‘An exchange shall be treated as occurring on or before March 1, 1986, if— ‘‘(A) on or before such date, the taxpayer adopts a plan of reorganization to which section 356 [of the In- ternal Revenue Code of 1986] applies, and ‘‘(B) such plan or reorganization is implemented and distributions pursuant to such plan are com- pleted on or before the date of enactment of this Act [Oct. 22, 1986].’’ § 1249. Gain from certain sales or exchanges of patents, etc., to foreign corporations (a) General rule Gain from the sale or exchange of a patent, an invention, model, or design (whether or not pat- ented), a copyright, a secret formula or process, or any other similar property right to any for- eign corporation by any United States person (as defined in section 7701(a)(30)) which controls such foreign corporation shall, if such gain would (but for the provisions of this subsection) be gain from the sale or exchange of a capital asset or of property described in section 1231, be considered as ordinary income. (b) Control For purposes of subsection (a), control means, with respect to any foreign corporation, the ownership, directly or indirectly, of stock pos- sessing more than 50 percent of the total com- bined voting power of all classes of stock enti- tled to vote. For purposes of this subsection, the rules for determining ownership of stock pre- scribed by section 958 shall apply. (Added Pub. L. 87–834, § 16(a), Oct. 16, 1962, 76 Stat. 1045; amended Pub. L. 89–809, title I, § 104(m)(3), Nov. 13, 1966, 80 Stat. 1563; Pub. L. 94–455, title XIX, § 1901(b)(3)(K), Oct. 4, 1976, 90 Stat. 1793; Pub. L. 113–295, div. A, title II, § 221(a)(84), Dec. 19, 2014, 128 Stat. 4049.) Editorial Notes AMENDMENTS 2014—Subsec. (a). Pub. L. 113–295 struck out ‘‘after December 31, 1962,’’ before ‘‘of a patent’’. 1976—Subsec. (a). Pub. L. 94–455 substituted ‘‘ordinary income’’ for ‘‘gain from the sale or exchange of prop- erty which is neither a capital asset nor property de- scribed in section 1231’’. 1966—Subsec. (a). Pub. L. 89–809 substituted ‘‘Gain’’ for ‘‘Except as provided in subsection (c), gain’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1976 AMENDMENT Amendment by Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title. EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89–809 applicable with respect to taxable years beginning after Dec. 31, 1966, see sec- tion 104(n) of Pub. L. 89–809, set out as a note under sec- tion 11 of this title. EFFECTIVE DATE Pub. L. 87–834, § 16(c), Oct. 16, 1962, 76 Stat. 1045, pro- vided that: ‘‘The amendments made by this section [en- acting this section] shall apply to taxable years begin- ning after December 31, 1962.’’ § 1250. Gain from dispositions of certain depre- ciable realty (a) General rule Except as otherwise provided in this section— (1) Additional depreciation after December 31, 1975 (A) In general If section 1250 property is disposed of after December 31, 1975, then the applicable per- centage of the lower of— (i) that portion of the additional depre- ciation (as defined in subsection (b)(1) or (4)) attributable to periods after December 31, 1975, in respect of the property, or (ii) the excess of the amount realized (in the case of a sale, exchange, or involun- tary conversion), or the fair market value of such property (in the case of any other disposition), over the adjusted basis of such property, shall be treated as gain which is ordinary in- come. Such gain shall be recognized not-