§ 1044. Rollover of publicly traded securities gain into specialized small business investment companies
(a)
Nonrecognition of gain
In the case of the sale of any publicly traded securities with respect to which the taxpayer elects the application of this section, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds—
(1)
the cost of any common stock or partnership interest in a specialized small business investment company purchased by the taxpayer during the 60-day period beginning on the date of such sale, reduced by
This section shall not apply to any gain which is treated as ordinary income for purposes of this subtitle.
(b)
Limitations
(1)
Limitation on individuals
In the case of an individual, the amount of gain which may be excluded under subsection (a) for any taxable year shall not exceed the lesser of—
(2)
Limitation on C corporations
In the case of a C corporation, the amount of gain which may be excluded under subsection (a) for any taxable year shall not exceed the lesser of—
(3)
Special rules for married individuals
For purposes of this subsection—
(A)
Separate returns
In the case of a separate return by a married individual, paragraph (1) shall be applied by substituting “$25,000” for “$50,000” and “$250,000” for “$500,000”.
(B)
Allocation of gain
In the case of any joint return, the amount of gain excluded under subsection (a) for any taxable year shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years.
(C)
Marital status
For purposes of this subsection, marital status shall be determined under section
7703.
(c)
Definitions and special rules
For purposes of this section—
(1)
Publicly traded securities
The term “publicly traded securities” means securities which are traded on an established securities market.
(2)
Purchase
The taxpayer shall be considered to have purchased any property if, but for subsection (d), the unadjusted basis of such property would be its cost within the meaning of section
1012.
(d)
Basis adjustments
If gain from any sale is not recognized by reason of subsection (a), such gain shall be applied to reduce (in the order acquired) the basis for determining gain or loss of any common stock or partnership interest in any specialized small business investment company which is purchased by the taxpayer during the 60-day period described in subsection (a). This subsection shall not apply for purposes of section
1202.