§ 1.1254-0. Table of contents for section 1254 recapture rules.

§ 1.1254-1 Treatment of gain from disposition of natural resource recapture property.

(a) In general.

(b) Definitions.

(1) Section 1254 costs.

(2) Natural resource recapture property.

(3) Disposition.

(c) Disposition of a portion of natural resource recapture property.

(1) Disposition of a portion (other than an undivided interest) of natural resource recapture property.

(2) Disposition of an undivided interest.

(3) Alternative allocation rule.

(d) Installment method.

§ 1.1254-2 Exceptions and limitations.

(a) Exception for gifts and section 1041 transfers.

(1) General rule.

(2) Part gift transactions.

(b) Exception for transfers at death.

(c) Limitation for certain tax-free transactions.

(1) General rule.

(2) Special rule for dispositions to certain tax exempt organizations.

(3) Transfers described.

(4) Special rules for section 332 transfers.

(d) Limitation for like kind exchanges and involuntary conversions.

(1) General rule.

(2) Disposition and acquisition of both natural resource recapture property and other property.

§ 1.1254-3 Section 1254 costs immediately after certain acquisitions.

(a) Transactions in which basis is determined by reference to cost or fair market value of property transferred.

(1) Basis determined under section 1012.

(2) Basis determined under section 301(d), 334(a), or 358(a)(2).

(3) Basis determined solely under former section 334(b)(2) or former section 334(c).

(4) Basis determined by reason of the application of section 1014(a).

(b) Gifts and certain tax-free transactions.

(1) General rule.

(2) Transactions covered.

(c) Certain transfers at death.

(d) Property received in a like kind exchange or involuntary conversion.

(1) General rule.

(2) Allocation of section 1254 costs among multiple natural resource recapture property acquired.

(e) Property transferred in cases to which section 1071 or 1081(b) applies.

§ 1.1254-4 Special rules for S corporations and their shareholders.

(a) In general.

(b) Determination of gain treated as ordinary income under section 1254 upon a disposition of natural resource recapture property by an S corporation.

(1) General rule.

(2) Examples.

(c) Character of gain recognized by a shareholder upon a sale or exchange of S corporation stock.

(1) General rule.

(2) Exceptions.

(3) Examples.

(d) Section 1254 costs of a shareholder.

(e) Section 1254 costs of an acquiring shareholder after certain acquisitions.

(1) Basis determined under section 1012.

(2) Basis determined under section 1014(a).

(3) Basis determined under section 1014(b)(9).

(4) Gifts and section 1041 transfers.

(f) Special rules for a corporation that was formerly an S corporation or formerly a C corporation.

(1) Section 1254 costs of an S corporation that was formerly a C corporation.

(2) Examples.

(3) Section 1254 costs of a C corporation that was formerly an S corporation.

(g) Determination of a shareholder's section 1254 costs upon certain stock transactions

(1) Issuance of stock.

(2) Natural resource recapture property acquired in exchange for stock.

(3) Treatment of nonvested stock.

(4) Exception.

(5) Aggregate of S corporation shareholders' section 1254 costs with respect to natural resource recapture property held by the S corporation

(6) Examples.

§ 1.1254-5 Special rules for partnerships and their partners.

(a) In general.

(b) Determination of gain treated as ordinary income under section 1254 upon the disposition of natural resource recapture property by a partnership.

(1) General rule.

(2) Exception to partner level recapture in the case of abusive allocations.

(3) Examples.

(c) Section 1254 costs of a partner.

(1) General rule.

(2) Section 1254 costs of a transferee partner after certain acquisitions.

(d) Property distributed to a partner.

(1) In general.

(2) Aggregate of partners' section 1254 costs with respect to natural resource recapture property held by a partnership.

§ 1.1254-6 Effective date of regulations.