Arkansas Code of 1987 (2023) › Title 26 - TAXATION (§§ 26-1-101 — 26-82-119) › Subtitle 5 - STATE TAXES (§§ 26-50-101 — 26-65-108) › Chapter 51 - INCOME TAXES (§§ 26-51-101 — 26-51-2804) › Subchapter 4 - COMPUTATION OF TAX LIABILITY (§§ 26-51-401 — 26-51-461) › Section 26-51-411 - Gain or loss - Sale of property

(a)
For the purpose of ascertaining the gain or loss from the sale or other disposition of real, personal, or mixed property, the basis shall be, in the case of property acquired before January 1, 1928, the assessed valuation of such property on the county tax books as of that date if such assessed valuation exceeds the original cost and, in all other cases, the cost of such property, except that:
(1)
In the case of such property which should be included in the inventory, the basis shall be the last inventory value;
(2)
(A)
In the case of property acquired by gift after March 9, 1929, the basis shall be the same as that which it would have been in the hands of the donor or the last preceding owner by whom it was not acquired by gift.
(B)
If the facts necessary to determine such basis are unknown to the donee, the Secretary of the Department of Finance and Administration shall use the assessed valuation of the property;
(3)
In the case of such property acquired by gift on or before March 9, 1929, the basis for ascertaining gain or loss from sale or other disposition of such property shall be the assessed valuation; and
(4)
In the case of such property acquired by bequest, devise, or inheritance, the basis shall be the appraised value of such property upon which state inheritance tax or estate tax was paid.
(b)
The basis for ascertaining the gain derived or loss sustained from the sale or other disposition of real, personal, or mixed property acquired before January 1, 1928, shall be the assessed value of such property including improvements as of January 1, 1928, or the actual cost of such property, but:
(1)
If its assessed valuation as of January 1, 1928, is in excess of its sale price at the time of disposition, then the deductible loss shall be the difference between the assessed valuation on January 1, 1928, and the amount realized from the sale less depreciation or depletion subsequently sustained;
(2)
If the assessed valuation as of January 1, 1928, is less than the sale price, then the taxable gain shall be the excess realized over the assessed valuation plus depreciation or depletion subsequently sustained; and
(3)
If the amount realized is more than the cost price but not more than its assessed valuation as of January 1, 1928, or less than the cost but not less than its assessed valuation on January 1, 1928, then no gain shall be included in and no loss deducted from the gross income.
(c)
For the purpose of the Income Tax Act of 1929, §
26-51-101
et seq., on any exchange of real, personal, or mixed property for any other like property of similar value no gain or loss shall be recognized.
(d)
(1)
In computing gain or loss from the sale of property, the difference between the amount realized and the adjusted basis is the amount of the gain or loss.
(2)
The adjusted basis of the property is its cost, increased for capital charges and decreased for depreciation and for depletion.
(3)
The amount realized from a sale or other disposition of property is the sum of any money received plus the fair market value of property or services received, less expenses.
(e)
Title
26 U.S.C. §§ 453
,
453A
, and
453B
, as in effect on January 1, 2005, are adopted concerning the installment method of accounting.
(f)
Title
26 U.S.C. § 1045
, as in effect on January 1, 1999, regarding gain on the sale or exchange of qualified small business stock, is adopted for the purpose of computing Arkansas income tax liability.
(g)
Title
26 U.S.C. §§ 1258
and
1259
, as in effect on January 1, 1999, regarding appreciated financial positions, are adopted for the purpose of computing Arkansas income tax liability.
(h)
Title
26 U.S.C. § 267
, as in effect on January 1, 2017, regarding losses, expenses, and interest arising from transactions between related taxpayers, is adopted for the purpose of computing Arkansas income tax liability.
Amended by Act 2019, No. 910,§ 3715, eff. 7/1/2019.
Amended by Act 2017, No. 155,§ 16, eff. for tax years beginning on and after 1/1/2015.
Acts 1929, No. 118, Art. 3, § 10; Pope's Dig., § 14033; Acts 1969, No. 236, § 4; A.S.A. 1947, § 84-2013; Acts 1995, No. 1160, § 12; 1999, No. 1126, § 25; 2001, No. 773, § 4; 2005, No. 675, § 7; 2007, No. 827, § 216.