§ 1397B. Nonrecognition of gain on rollover of empowerment zone investments
(a)
Nonrecognition of gain
In the case of any sale of a qualified empowerment zone asset held by the taxpayer for more than 1 year and with respect to which such 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—
(b)
Definitions and special rules
For purposes of this section—
(1)
Qualified empowerment zone asset
(A)
In general
The term “qualified empowerment zone asset” means any property which would be a qualified community asset (as defined in section
1400F) if in section
1400F—
(ii)
references to enterprise zone businesses (as defined in section
1397C) were substituted for references to renewal community businesses, and
(3)
Purchase
A taxpayer shall be treated as having purchased any property if, but for paragraph (4), the unadjusted basis of such property in the hands of the taxpayer would be its cost (within the meaning of section
1012).
(4)
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 qualified empowerment zone asset which is purchased by the taxpayer during the 60-day period described in subsection (a). This paragraph shall not apply for purposes of section
1202.
(5)
Holding period
For purposes of determining whether the nonrecognition of gain under subsection (a) applies to any qualified empowerment zone asset which is sold—
(A)
the taxpayer’s holding period for such asset and the asset referred to in subsection (a)(1) shall be determined without regard to section
1223, and