§ 44-14-12 - Gain or loss from disposition of securities.
SECTION 44-14-12
§ 44-14-12 Gain or loss from dispositionof securities. – Gains or losses from the sale or other disposition of securities shall bedetermined as follows:
(1) In the case of securities acquired on or after January 1,1941, the basis shall be the cost of the securities, and the tax administratormay require that the basis be adjusted for amortization of premiums, if any, on"securities" as defined in § 44-14-2(5)(ii), reasonably allowed orallowable to the date of sale or other disposition of the securities.
(2) In the case of securities acquired prior to January 1,1941, except as otherwise provided in subdivision (3) of this subsection, thebasis shall be the market value on January 1, 1941, of the securities,provided, that:
(i) No gain shall be recognized if the proceeds of the saleor other disposition of the securities, though greater than the market value onJanuary 1, 1941, are less than or equal to the cost of the securities;
(ii) No loss shall be recognized if the proceeds of the saleor other disposition of the securities, though less than the market value onJanuary 1, 1941, are greater than or equal to the cost of the securities;
(iii) If the cost of the securities, though greater than themarket value on January 1, 1941, is less than the proceeds of the sale or otherdisposition of the securities, then the basis shall equal the cost of thesecurities;
(iv) If the cost of the securities, though less than themarket value on January 1, 1941, is greater than the proceeds of the sale orother disposition of the securities, then the basis shall equal the cost of thesecurities.
(3) In the case of "securities", as defined in §44-14-2(5)(ii), acquired at a premium prior to January 1, 1941, the basis shallbe the market value on January 1, 1941, of the securities but not higher thanthe true amortized value as of January 1, 1941, of the securities, and the taxadministrator may require that the basis be adjusted for amortization of thepremiums, based upon the true amortized value, reasonably allowed or allowableto the date of sale or other disposition of the securities; provided, that gainshall be recognized only to the extent that the proceeds of the sale or otherdisposition of the securities exceed the adjusted true amortized value as ofthe date of sale or other disposition of the securities.