(d) * * *

(4) Stock acquired from a decedent.—In the case of stock of a PFIC that is acquired by
bequest, devise, or inheritance (or by the decedent’s estate) and with respect to which a section
1296 election was in effect as of the date of the decedent’s death, notwithstanding section 1014 or
section 1022, the basis of such stock in the hands of the person so acquiring it shall be the
adjusted basis of such stock in the hands of the decedent immediately before his death (or, if
lesser, the basis that would have been determined under section 1014 or section 1022 without
regard to this paragraph (d)).


(j) Effective/applicability date.—The provisions in this section are applicable for taxable years
beginning on or after May 3, 2004. The provisions of paragraph (d)(4) of this section relating to
section 1022 are effective on and after the date these regulations are published as final regulations
in the Federal Register.

[Prop. Reg. § 1.1296-1.]

[Proposed 5-11-2015.]

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