(a) Sale or exchange of certain distributed property.—(1) Unrealized receivables.— Gain or loss on the disposition by a partner of unrealized receivables (as defined in § 30371(c) of this title) distributed by a partnership, shall be considered ordinary.(2) Inventory items.— Gain or loss on the sale or exchange by a partner of inventory items (as defined in § 30371(d) of this title distributed by a partnership shall, if sold or exchanged within five (5) years from the date of the distribution, be considered ordinary.(b) Holding period for distributed property.— In determining the period for which a partner has held property received in a distribution from a partnership (other than for purposes of subsection (a)), the provisions of § 30141(g) of this title shall apply(c) Special rules.—(1) Substituted basis property.—(A) In general.— If any property described in subsection (a) is disposed of in a nonrecognition transaction, the tax treatment which applies to such property under such subsection shall also apply to any substituted basis property resulting from such transaction. A similar rule shall also apply in the case of a series of nonrecognition transactions.(B) Exception for

subsection shall also apply to any substituted basis property resulting from such transaction. A similar rule shall also apply in the case of a series of nonrecognition transactions.(B) Exception for stock in a corporation or other entity subject to taxation as a regular corporation.— Paragraph (A) shall not apply to any stock in a corporation or other entity subject to taxation as a regular corporation received in an exchange described in § 30144(b)(5) of this title. History —Jan. 31, 2011, No. 1, § 1073.05, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 91.