N.Y. General City Model 772/66 § 25: Ascertainment of gain or loss; exchange of property

§ 25. Ascertainment of gain or loss; exchange of property. 1. For the

purpose of ascertaining the gain derived or loss sustained from the sale

or other disposition of property, real, personal or mixed, the basis

shall be the cost thereof, or the inventoried value if the inventory is

made in accordance with section twenty-six of this part.

2. Notwithstanding subdivision one of this section, with respect to

gain derived from the sale or other disposition of any property acquired

prior to January first, nineteen hundred sixty-six, except stock in

trade of the taxpayer or other property of a kind which would properly

be included in the inventory of the taxpayer if on hand at the close of

the taxable year, or property held by the taxpayer primarily for sale to

customers in the ordinary course of its trade or business, and accounts

or notes receivable acquired in the ordinary course of trade or business

from the sale of such stock in trade or property, or for services

rendered, net income shall not include

(a) That portion of the gain included in determining net income

pursuant to subdivision one of this section with respect to each such

property, which exceeds

(b) The amount of gain, if any, that would be included in determining

net income pursuant to subdivision one of this section with respect to

each such property if the basis of such property on the date of sale or

other disposition were equal to its fair market value on January first,

nineteen hundred sixty-six, plus or minus all adjustments to basis made

with respect to each such property in computing net income for periods

on or after January first, nineteen hundred sixty-six;

provided that the total adjustment to net income provided by this

subdivision shall not exceed the amount of the taxpayer's net gain from

the sale or other disposition of all such property, as determined

pursuant to subdivision one of this section.

3. Upon the sale or exchange of property the amount of the gain or

loss shall be determined in the manner prescribed by section fifteen of

this part and the basis of such property shall be determined in the

manner prescribed by section sixteen of this part.

4. In the case of any bond, with respect to which a deduction for

amortizable bond premium is allowable under paragraph (i) of subdivision

one of section twenty-nine of this part, the basis for determining gain

or loss shall be reduced by the total amount of such deductions so

allowable.