rules For purposes of this section— (1) Treatment of improvements, etc If there is an addition to the adjusted basis of any tangible property or of any stock in a corporation during the taxable year by reason of an improvement to such property or a contribution to capital of such corporation— (A) such addition shall never be taken into account under subsection (d)(1)(A) if the aggregate amount thereof during the taxable year with respect to such property or stock is less than $1,000, and (B) such addition shall be treated as a separate asset acquired at the close of such taxable year if the aggregate amount thereof during the taxable year with respect to such property or stock is $1,000 or more. A rule similar to the rule of the preceding sentence shall apply to any other portion of an asset to the extent that separate treatment of such portion is appropriate to carry out the purposes of this section. (2) Assets which are not indexed assets throughout holding period The applicable inflation adjustment shall be appropriately reduced for periods during which the asset was not an indexed asset. (3) Treatment of certain distributions A distribution with respect to stock in a corporation which is not a dividend shall be treated as a disposition. (4) Section cannot increase ordinary loss To the extent that (but for this paragraph) this section would create or increase a net ordinary loss to which section 1231(a)(2) applies or an ordinary loss to which any other provision of this title applies, such provision shall not apply. The taxpayer shall be treated as having a long-term capital loss in an amount equal to the amount of the ordinary loss to which the preceding sentence applies. (5) Acquisition date where there has been prior application of subsection (a)(1) with respect to the taxpayer If there has been a prior application of subsection (a)(1) to an asset while such asset was held by the taxpayer, the date of acquisition of such asset by the taxpayer shall be treated as not earlier than the date of the most recent