Section 11-614. Ascertainment of gain or loss

1.  For  the purpose of
  ascertaining the gain derived or loss sustained from the sale  or  other
  disposition of property, real, personal or mixed, the basis shall be the
  cost  thereof,  or  the  inventoried  value  if the inventory is made in
  accordance with section 11-617 of this part.
    2. Notwithstanding subdivision one of this section,  with  respect  to
  gain derived from the sale or other disposition of any property acquired
  prior  to  January  first,  nineteen  hundred sixty-six, except stock in
  trade of the taxpayer or other property of a kind which  would  properly
  be  included in the inventory of the taxpayer if on hand at the close of
  the taxable year, or property held by the taxpayer primarily for sale to
  customers in the ordinary course of its trade or business, and  accounts
  or notes receivable acquired in the ordinary course of trade or business
  from  the  sale  of  such  stock  in  trade or property, or for services
  rendered, net income shall not include:
    (a) That portion of  the  gain  included  in  determining  net  income
  pursuant  to  subdivision  one of this section with respect to each such
  property, which exceeds:
    (b) The amount of gain that  would  be  included  in  determining  net
  income  pursuant to subdivision one of this section with respect to each
  such property if the basis of such property on the date of sale or other
  disposition were equal to  its  fair  market  value  on  January  first,
  nineteen  hundred sixty-six, plus or minus all adjustments to basis made
  with respect to each such property in computing net income  for  periods
  on  or after January first, nineteen hundred sixty-six provided that the
  total adjustment to net income provided by this  subdivision  shall  not
  exceed  the  amount  of  the  taxpayer's net gain from the sale or other
  disposition of all such property, as determined pursuant to  subdivision
  one of this section.
    3.  In  the  case  of  any bond, with respect to which a deduction for
  amortizable bond premium is allowable under subdivision nine of  section
  11-621  of  this  part,  the basis for determining gain or loss shall be
  reduced by the total amount of such deductions so allowable.