shall report income in the amount of any deduction allowed under this section in the taxable year in which the Settlement Trust actually receives such contribution. (4) Period In determining the period that a Settlement Trust has held property for which a deduction is allowed under this section, the period the Native Corporation has held such property shall be included. (5) Basis The basis that a Settlement Trust has for which a deduction is allowed under this section shall be equal to the adjusted basis of the Native Corporation in such property immediately before such contribution. (6) Prohibition No deduction shall be allowed under this section with respect to any contributions made to a Settlement Trust which are in violation of subsection (a)(2) or (c)(2) of section 39 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1629e ). (g) Election by Settlement Trust To Defer Income Recognition (1) In general In the case of a contribution which consists of property other than cash, a Settlement Trust may elect to defer recognition of any income related to such property until the sale or exchange of such property, in whole or in part, by the Settlement Trust. (2) Treatment In the case of property described in paragraph (1), any income or gain received by the Settlement Trust upon sale or exchange of such property shall be treated as— (A) for such amount of the income or gain as is equal to or less than the amount of income deferred pursuant to this subsection, ordinary income, and (B) for any amounts of the income or gain which are in excess of the amount of income deferred pursuant to this subsection, having the same character as if this subsection did not apply. (3) Election (A) In general For each taxable year, a Settlement Trust may elect to apply this subsection for any property described in paragraph (1) which was contributed during such year. Any property to which the election applies shall be identified and described with reasonable particularity on the income tax return or amended income tax return of