In the case of any applicable asset acquisition, for purposes of determining both—
(1)the transferee’s basis in such assets, and
(2)the gain or loss of the transferor with respect to such acquisition,
the consideration received for such assets shall be allocated among such assets acquired in such acquisition in the same manner as amounts are allocated to assets under section
338(b)(5). If in connection with an applicable asset acquisition, the transferee and transferor agree in writing as to the allocation of any consideration, or as to the fair market value of any of the assets, such agreement shall be binding on both the transferee and transferor unless the Secretary determines that such allocation (or fair market value) is not appropriate.
(b) Information required to be furnished to Secretary
Under regulations, the transferor and transferee in an applicable asset acquisition shall, at such times and in such manner as may be provided in such regulations, furnish to the Secretary the following information:
(1)The amount of the consideration received for the assets which is allocated to section
(2)Any modification of the amount described in paragraph (1).
(3)Any other information with respect to other assets transferred in such acquisition as the Secretary deems necessary to carry out the provisions of this section.
(c) Applicable asset acquisition
For purposes of this section, the term “applicable asset acquisition” means any transfer (whether directly or indirectly)—
(1)of assets which constitute a trade or business, and
(2)with respect to which the transferee’s basis in such assets is determined wholly by reference to the consideration paid for such assets.
A transfer shall not be treated as failing to be an applicable asset acquisition merely because section
1031 applies to a portion of the assets transferred.
(d) Treatment of certain partnership transactions
In the case of a distribution of partnership property or a transfer of an interest in a partnership—
(1)the rules of subsection (a) shall apply but only for purposes of determining the value of section
197 intangibles for purposes of applying section
755 applies, such distribution or transfer (as the case may be) shall be treated as an applicable asset acquisition for purposes of subsection (b).
(e) Information required in case of certain transfers of interests in entities
(1) In general
(A)a person who is a 10-percent owner with respect to any entity transfers an interest in such entity, and
(B)in connection with such transfer, such owner (or a related person) enters into an employment contract, covenant not to compete, royalty or lease agreement, or other agreement with the transferee,
such owner and the transferee shall, at such time and in such manner as the Secretary may prescribe, furnish such information as the Secretary may require.
(2) 10-percent owner
For purposes of this subsection—
(A) In general
The term “10-percent owner” means, with respect to any entity, any person who holds 10 percent or more (by value) of the interests in such entity immediately before the transfer.
(B) Constructive ownership
318 shall apply in determining ownership of stock in a corporation. Similar principles shall apply in determining the ownership of interests in any other entity.
(3) Related person
For purposes of this subsection, the term “related person” means any person who is related (within the meaning of section
707(b)(1)) to the 10-percent owner.
(f) Cross reference
For provisions relating to penalties for failure to file a return required by this section, see section
A prior section
1060 was renumbered section
1061 of this title.
1993—Subsec. (b)(1). Pub. L. 103–66, § 13261(e)(1), substituted “section
197 intangibles” for “goodwill or going concern value”.
Subsec. (d)(1). Pub. L. 103–66, § 13261(e)(2), substituted “section
197 intangibles” for “goodwill or going concern value (or similar items)”.
1990—Subsec. (a). Pub. L. 101–508, § 11323(a), inserted at end “If in connection with an applicable asset acquisition, the transferee and transferor agree in writing as to the allocation of any consideration, or as to the fair market value of any of the assets, such agreement shall be binding on both the transferee and transferor unless the Secretary determines that such allocation (or fair market value) is not appropriate.”
Subsecs. (e), (f). Pub. L. 101–508, § 11323(b)(1), added subsec. (e) and redesignated former subsec. (e) as (f).
1988—Subsec. (b)(3). Pub. L. 100–647, § 1006(h)(1), substituted “deems” for “may find”.
Amendment by Pub. L. 103–66applicable, except as otherwise provided, with respect to property acquired after Aug. 10, 1993, see section 13261(g) ofPub. L. 103–66, set out as an Effective Date note under section
197 of this title.
Effective Date of 1990 Amendment
Amendment by Pub. L. 101–508applicable to acquisitions after Oct. 9, 1990, but not applicable to any acquisition pursuant to a written binding contract in effect on Oct. 9, 1990, and at all times thereafter before such acquisition, see section 11323(d) ofPub. L. 101–508, set out as a note under section
338 of this title.
Effective Date of 1988 Amendment
Amendment by Pub. L. 100–647effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) ofPub. L. 100–647, set out as a note under section
1 of this title.
Effective Date of 1986 Amendment
Pub. L. 99–514, title VI, § 641(c),Oct. 22, 1986, 100 Stat. 2283, provided that: “The amendments made by this section [enacting this section and renumbering former section
1061] shall apply to any acquisition of assets after May 6, 1986, unless such acquisition is pursuant to a binding contract which was in effect on May 6, 1986, and at all times thereafter.”
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
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