26 U.S. Code § 1012 - Basis of property—cost
The basis of property shall be the cost of such property, except as otherwise provided in this subchapter and subchapters C (relating to corporate distributions and adjustments), K (relating to partners and partnerships), and P (relating to capital gains and losses).
The cost of real property shall not include any amount in respect of real property taxes which are treated under section 164(d) as imposed on the taxpayer.
In the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under this section shall be applied on an account by account basis.
Except as provided in subparagraph (B), any stock for which an average basis method is permissible under this section which is acquired before January 1, 2012, shall be treated as a separate account from any such stock acquired on or after such date.
In the case of any stock acquired after December 31, 2011, in connection with a dividend reinvestment plan, the basis of such stock while held as part of such plan shall be determined using one of the methods which may be used for determining the basis of stock in a regulated investment company.
In the case of the transfer to another account of stock to which paragraph (1) applies, such stock shall have a cost basis in such other account equal to its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees or other charges taken into account in connection with such transfer).
Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.
Notwithstanding paragraph (1), in the case of an election under rules similar to the rules of subsection (c)(2)(B) with respect to stock held in connection with a dividend reinvestment plan, the average basis method is permissible with respect to all such stock without regard to the date of the acquisition of such stock.
The term “dividend reinvestment plan” means any arrangement under which dividends on any stock are reinvested in stock identical to the stock with respect to which the dividends are paid.
2014—Subsec. (c)(2). Pub. L. 113–295, § 210(f)(1)(A), substituted “regulated investment companies” for “funds” in heading.
Subsec. (c)(2)(A). Pub. L. 113–295, § 220(n), substituted “this section” for “section 1012”.
Subsec. (c)(2)(B). Pub. L. 113–295, § 210(f)(1)(C), substituted “regulated investment company” for “fund” wherever appearing.
Pub. L. 113–295, § 210(f)(1)(B), struck out “fund” after “Election” in heading.
Subsec. (d)(1). Pub. L. 113–295, § 210(f)(2), substituted “December 31, 2011” for “December 31, 2010” and “a regulated investment company” for “an open-end fund”.
Subsec. (d)(3). Pub. L. 113–295, § 210(f)(3), amended par. (3) generally. Prior to amendment, text read as follows: “Rules similar to the rules of subsection (c)(2) shall apply for purposes of this subsection.”
2008—Pub. L. 110–343 designated first sentence as subsec. (a) and second sentence as subsec. (b), inserted headings, and added subsecs. (c) and (d).
Amendment by section 210(f)(1)–(3) of Pub. L. 113–295 effective as if included in the provisions of the Energy Improvement and Extension Act of 2008, Pub. L. 110–343, div. B, to which such amendment relates, see section 210(h) of Pub. L. 113–295, set out as a note under section 45 of this title.