I.R.C. § 1060(a) General Rule —
In the case of any applicable asset acquisition, for purposes of determining both—
I.R.C. § 1060(a)(1) —
the transferee's basis in such assets, and
I.R.C. § 1060(a)(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.
I.R.C. § 1060(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:
I.R.C. § 1060(b)(1) —
The amount of the consideration received for the assets which is allocated to section
197 intangibles.
I.R.C. § 1060(b)(2) —
Any modification of the amount described in paragraph (1).
I.R.C. § 1060(b)(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.
I.R.C. § 1060(c) Applicable Asset Acquisition —
For purposes of this section, the term “applicable asset acquisition” means any
transfer (whether directly or indirectly)—
I.R.C. § 1060(c)(1) —
of assets which constitute a trade or business, and
I.R.C. § 1060(c)(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.
I.R.C. § 1060(d) Treatment Of Certain Partnership Transactions —
In the case of a distribution of partnership property or a transfer of an interest
in a partnership—
I.R.C. § 1060(d)(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, and
I.R.C. § 1060(d)(2) —
if 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).
I.R.C. § 1060(e) Information Required In Case Of Certain Transfers Of Interests In Entities
I.R.C. § 1060(e)(1) In General —
If—
I.R.C. § 1060(e)(1)(A) —
a person who is a 10-percent owner with respect to any entity transfers an interest
in such entity, and
I.R.C. § 1060(e)(1)(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.
I.R.C. § 1060(e)(2) 10-Percent Owner —
For purposes of this subsection—
I.R.C. § 1060(e)(2)(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.
I.R.C. § 1060(e)(2)(B) Constructive Ownership —
Section 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.
I.R.C. § 1060(e)(3) Related Person —
For purposes of this subsection, the term “related person” means any person who
is related (within the meaning of section 267(b) or 707(b)(1)) to the 10-percent owner.
I.R.C. § 1060(f) Cross Reference —
For provisions relating to penalties for failure to file a return required by this
section, see section 6721.
(Added Pub. L. 99-514, title VI, Sec. 641(a), Oct. 22, 1986, 100 Stat. 2282, and amended Pub. L. 100-647, title I, Sec. 1006(h)(1),
(2), (3)(B), Nov. 10, 1988, 102 Stat. 3410; Pub. L. 101-508, title XI, Sec. 11323(a), (b)(1), Nov. 5, 1990, 104 Stat. 1388-464; Pub. L. 103-66, title XIII, Sec. 13261(e)(1), Aug. 10, 1993, 107 Stat. 312.)
BACKGROUND NOTES
AMENDMENTS
1993 - Subsec. (b)(1). Pub. L. 103-66, Sec. 13261(e)(1), amended par. (1) by substituting “section 197 intangibles”
for “goodwill or going concern value”.
Subsec. (d)(1). Pub. L. 103-66, Sec. 13261(e)(2), amended par. (1) by substituting “section 197 intangibles” for “goodwill or going
concern value”.
1990 - Subsec. (a). Pub. L. 101-508, Sec. 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, Sec. 11323(b)(1), added subsec. (e) and redesignated former subsec. (e) as (f).
1988 - Subsec. (b)(3). Pub. L. 100-647, Sec. 1006(h)(1), substituted ‘deems’ for ‘may find’.
Subsec. (d). Pub. L. 100-647, Sec. 1006(h)(2), added subsec. (d).
Subsec. (e). Pub. L. 100-647, Sec. 1006(h)(3)(B), added subsec. (e).
EFFECTIVE DATE OF 1993 AMENDMENTS
Amendments by Pub. L. 103-66, Sec. 13261(e), effective for property acquired after August 10, 1993. Section 13261(g)(2)-(3) of
Pub. L. 103-66, as amended by Pub. L. 104-188, Sec. 1703(l), provided that:
“(2) Election to Have Amendments Apply to Property Acquired After July 25, 1991.-
“(A) In General.-If an election under this paragraph applies to the taxpayer-
“(i) the amendments made by this section shall apply to property acquired by the taxpayer
after July 25, 1991,
“(ii) subsection (c)(1)(A)
of section 197 of the Internal Revenue Code of 1986 (as added by this section) (and so much of subsection (f)(9)(A) of such section
197 as precedes clause (i) thereof)
shall be applied with respect to the taxpayer by treating July 25, 1991, as the date
of the enactment of such section, and
“(iii) in applying subsection
(f)(9) of such section, with respect to any property acquired by the taxpayer or a
related person on or before the date of the enactment of this Act, only holding or
use on July 25, 1991, shall be taken into account.
“(B) Election.-An election under this paragraph shall be made at such time and in
such manner as the Secretary of the Treasury or his delegate may prescribe. Such an
election by any taxpayer, once made-
“(i) may be revoked only with the consent of the Secretary, and
“(ii) shall apply to the taxpayer making such election and any other taxpayer under
common control with the taxpayer (within the meaning of subparagraphs (A)
and (B) of section 41(f)(1) of such Code) at any time after August 2, 1993, and on
or before the date on which such election is made.
“(3) Elective Binding Contract Exception.-
“(A) In General.-The amendments made by this section shall not apply to any acquisition
of property by the taxpayer if-
“(i) such acquisition is pursuant to a written binding contract in effect on the date
of the enactment of this Act and at all times thereafter before such acquisition,
“(ii) an election under paragraph (2) does not apply to the taxpayer, and
“(iii) the taxpayer makes an election under this paragraph with respect to such contract.
“(B) Election.-An election under this paragraph shall be made at such time and in
such manner as the Secretary of the Treasury or his delegate shall prescribe. Such
an election, once made-
“(i) may be revoked only with the consent of the Secretary, and
“(ii) shall apply to all property acquired pursuant to the contract with respect to
which such election was made.”
EFFECTIVE DATE OF 1990 AMENDMENT
Amendment by Pub. L. 101-508 applicable 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) of Pub. L. 101-508, set out as a note under section 338 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, 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) of Pub. L. 100-647, set out as a note under section 1 of this title.
EFFECTIVE DATE
Section 641(c) of Pub. L. 99-514 provided that: ‘The amendments made by this section
(enacting this section and renumbering former section 1060 as 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.’
PRIOR PROVISIONS
A prior section 1060 was renumbered section 1061 of this title.
