F.1. Special Rules

(1) The net capital gain on the sale of a listed common stock purchased before

December 31, 1969, is the difference between the selling price and the greater of either the foundation’s basis in the stock, or the mean average of the highest and lowest quotations on December 31, 1969, plus or minus subsequent adjustment to the date of sale. See Rev. Rul. 74-403, 1974-2 C.B. 381.

(2) Appreciated stock held continuously until it was distributed to a private foundation

in 1971, in satisfaction of a specific bequest and a percentage of the residuary estate of an individual who died in 1967, will be considered held by the foundation on December 31, 1969, and the basis of the stock for purposes of computing capital gain includible in net investment income will be the fair market value of the stock as of December 31, 1969, even though, in the case of the residuary bequest, the property that ultimately passed to the foundation hadn’t been identified on that date. See Rev. Rul. 76-424, 1976-2 C.B. 367.