(1) Application of subsection This subsection shall apply to
(A) any nonqualified written notice of allocation which
(i) was paid as a patronage dividend, or
(ii) was paid by an organization described in section
1381 (a)(1) on a patronage basis with respect to earnings derived from business or sources described in section
1382 (c)(2)(A), and
(B) any nonqualified per-unit retain certificate which was paid as a per-unit retain allocation.
(2) Basis; amount of gain In the case of any nonqualified written notice of allocation or nonqualified per-unit retain certificate to which this subsection applies, for purposes of this chapter
(A) the basis of such written notice of allocation or per-unit retain certificate in the hands of the patron to whom such written notice of allocation or per-unit retain certificate was paid shall be zero,
(B) the basis of such written notice of allocation or per-unit retain certificate which was acquired from a decedent shall be its basis in the hands of the decedent, and
(C) gain on the redemption, sale, or other disposition of such written notice of allocation or per-unit retain certificate by any person shall, to the extent that the stated dollar amount of such written notice of allocation or per-unit retain certificate exceeds its basis, be considered as ordinary income.