Source: https://www.law.cornell.edu/uscode/text/26/1237
Timestamp: 2017-10-21 10:47:47
Document Index: 518070664

Matched Legal Cases: ['§ 1237', '§ 1237', '§ 1237', '§\u202f1237', '§\u202f1', '§\u202f55', '§\u202f2', '§\u202f1901', '§\u202f1314', '§\u202f1314', '§\u202f1314', '§\u202f1906', '§\u202f1901', '§\u202f2', '§\u202f2', '§\u202f1', '§\u202f2', '§\u202f2', '§\u202f3', '§\u202f1', '§\u202f2']

26 U.S. Code § 1237 - Real property subdivided for sale | US Law | LII / Legal Information Institute
U.S. Code › Title 26 › Subtitle A › Chapter 1 › Subchapter P › Part IV › § 1237
26 U.S. Code § 1237 - Real property subdivided for sale
§ 1237.
Real property subdivided for sale
(a) GeneralAny lot or parcel which is part of a tract of real property in the hands of a taxpayer other than a C corporation shall not be deemed to be held primarily for sale to customers in the ordinary course of trade or business at the time of sale solely because of the taxpayer having subdivided such tract for purposes of sale or because of any activity incident to such subdivision or sale, if—
(3) Necessary improvementsNo improvement shall be deemed a substantial improvement for purposes of subsection (a) if the lot or parcel is held by the taxpayer for a period of 10 years and if—
(Aug. 16, 1954, ch. 736, 68A Stat. 330; Apr. 27, 1956, ch. 214, §§ 1, 2, 70 Stat. 118; Pub. L. 85–866, title I, § 55, Sept. 2, 1958, 72 Stat. 1645; Pub. L. 91–686, § 2(a), Jan. 12, 1971, 84 Stat. 2071; Pub. L. 94–455, title XIX, §§ 1901(a)(138), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1787, 1834; Pub. L. 104–188, title I, § 1314, Aug. 20, 1996, 110 Stat. 1785.)
1996—Subsec. (a). Pub. L. 104–188, § 1314(a), substituted “other than a C corporation” for “other than a corporation” in introductory provisions.
Subsec. (a)(2)(A). Pub. L. 104–188, § 1314(b), inserted “an S corporation which included the taxpayer as a shareholder,” after “controlled by the taxpayer,”.
1976—Subsec. (b)(3)(B), (C). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (d). Pub. L. 94–455, § 1901(a)(138), struck out effective date provision making the section applicable only with respect to sales of property occurring after Dec. 31, 1953, except that for purposes of subsec. (c) defining tract of real property and for determining the number of sales under subsec. (b)(1) of this section, all sales of lots and parcels from any tract of real property during the period of 5 years before Dec. 31, 1953, shall be taken into account, except as provided in subsec. (c).
1971—Subsec. (a). Pub. L. 91–686, § 2(a)(1), substituted “other than a corporation” for “(including corporations only if no shareholder directly or indirectly holds real property for sale to customers in the ordinary course of trade or business and only in the case of property described in the last sentence of subsection (b)(3))”.
Subsec. (b). Pub. L. 91–686, § 2(a)(2), struck out sentence which made subpars. (B) and (C) inapplicable in the case of property acquired through the foreclosure of a lien thereon which secured the payment of an indebtedness to the taxpayer or (in the case of a corporation) to a creditor who has transferred the foreclosure bid to the taxpayer in exchange for all of its stock and other consideration and in the case of property adjacent to such property if 80 percent of the real property owned by the taxpayer was property described in the first part of the sentence.
1956—Subsec. (a). Act Apr. 27, 1956, § 1, substituted “(including corporations only if no shareholder directly or indirectly holds real property for sale to customers in the ordinary course of trade or business and only in the case of property described in the last sentence of subsection (b)(3))” for “other than a corporation”.
Subsec. (b)(3). Act Apr. 27, 1956, § 2, substituted “water, sewer, or drainage facilities” for “water or sewer facilities” in subpar. (A), and inserted provision at end that requirements of subpars. (B) and (C) do not apply to certain specified property.
Pub. L. 91–686, § 2(b), Jan. 12, 1971, 84 Stat. 2071, provided that:
“The amendments made by subsection (a) [amending this section] shall be effective for taxable years beginning after the date of enactment of this Act [Jan. 12, 1971].”
Act Apr. 27, 1956, ch. 214, § 3, 70 Stat. 119, provided that:
“This Act [amending this section] shall apply to all taxable years beginning after Dec. 31, 1954.”
Pub. L. 91–686, § 1, Jan. 12, 1971, 84 Stat. 2070, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided:
(a) for purposes of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] any lot or parcel of real property sold or exchanged by a corporation which would, but for this Act, be treated as property held primarily for sale to customers in the ordinary course of trade or business shall not, except to the extent provided in (b), be so treated if—
no shareholder of the corporation directly or indirectly holds real property primarily for sale to customers in the ordinary course of trade or business; and
such lot or parcel is a part of real property (i) held for more than twenty-five years at the time of sale or exchange, and (ii) acquired before January 1, 1934, by the corporation as a result of the foreclosure of a lien (or liens) thereon which secured the payment of indebtedness held by one or more creditors who transferred one or more foreclosure bids to the corporation in exchange for all its stock (with or without other consideration), or
such lot or parcel is a part of additional real property acquired before January 1, 1957, by the corporation in the near vicinity of any real property to which subparagraph (A) applies, or
such lot or parcel is wholly or to some extent a part of any minor acquisition made after December 31, 1956, by the corporation to adjust boundaries, to fill gaps in previously acquired property, to facilitate the installation of streets, utilities, and other public facilities, or to facilitate the sale of adjacent property, or
such lot or parcel is wholly or to some extent a part of a reacquisition by the corporation after December 31, 1956, of property previously owned by the corporation;
acquisitions described in paragraph (2)(B)(ii) and reacquisitions described in paragraph (2)(B)(iii), or
acquisitions of real property used in a trade or business of the corporation or held for investment by the corporation; and
the corporation did not after December 31, 1957, sell or exchange (except in condemnation or under threat of condemnation) any residential lot or parcel on which, at the time of the sale or exchange, there existed any substantial improvements (other than improvements in existence at the time the land was acquired by the corporation) except subdivision, clearing, grubbing, and grading, building or installation of water, sewer, and drainage facilities, construction of roads, streets, and sidewalks, and installation of utilities.”