Title 44
Taxation

Chapter 14
Taxation of Banks

R.I. Gen. Laws § 44-14-12

§ 44-14-12. Gain or loss from disposition of securities.

Gains or losses from the sale or other disposition of securities shall be determined 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 administrator may require that the basis be adjusted for amortization of premiums, if any, on “securities” as defined in § 44-14-2(5)(ii), reasonably allowed or allowable 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, the basis 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 sale or other disposition of the securities, though greater than the market value on January 1, 1941, are less than or equal to the cost of the securities;

(ii) No loss shall be recognized if the proceeds of the sale or other disposition of the securities, though less than the market value on January 1, 1941, are greater than or equal to the cost of the securities;

(iii) If the cost of the securities, though greater than the market value on January 1, 1941, is less than the proceeds of the sale or other disposition of the securities, then the basis shall equal the cost of the securities;

(iv) If the cost of the securities, though less than the market value on January 1, 1941, is greater than the proceeds of the sale or other disposition of the securities, then the basis shall equal the cost of the securities.

(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 shall be the market value on January 1, 1941, of the securities but not higher than the true amortized value as of January 1, 1941, of the securities, and the tax administrator may require that the basis be adjusted for amortization of the premiums, based upon the true amortized value, reasonably allowed or allowable to the date of sale or other disposition of the securities; provided, that gain shall be recognized only to the extent that the proceeds of the sale or other disposition of the securities exceed the adjusted true amortized value as of the date of sale or other disposition of the securities.

History of Section.
P.L. 1942, ch. 1212, art. 7, § 6; P.L. 1943, ch. 1341, § 3; G.L. 1956, § 44-14-12.