Editor's Note: Pub. L. 115-97, Sec. 13313(a), struck Sec. 1044, effective for sales after December 31, 2017.
I.R.C. § 1044(a) Nonrecognition Of Gain —
Editor's Note: Pub. L. 115-97, Sec. 13313(a), struck Sec. 1044, effective for sales after December 31, 2017.
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—
I.R.C. § 1044(a)(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
I.R.C. § 1044(a)(2) —
any portion of such cost previously taken into account under this section.
This section shall not apply to any
gain which is treated as ordinary income for purposes of this subtitle.
I.R.C. § 1044(b) Limitations —
Editor's Note: Pub. L. 115-97, Sec. 13313(a), struck Sec. 1044, effective for sales after December 31, 2017.
I.R.C. § 1044(b)(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—
I.R.C. § 1044(b)(1)(A) —
$50,000, or
I.R.C. § 1044(b)(1)(B) —
$500,000, reduced by the amount of gain excluded under subsection (a) for all preceding
taxable years.
I.R.C. § 1044(b)(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—
I.R.C. § 1044(b)(2)(A) —
$250,000, or
I.R.C. § 1044(b)(2)(B) —
$1,000,000, reduced by the amount of gain excluded under subsection (a) for all
preceding taxable years.
I.R.C. § 1044(b)(3) Special Rules For Married Individuals —
For purposes of this subsection—
I.R.C. § 1044(b)(3)(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”.
I.R.C. § 1044(b)(3)(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.
I.R.C. § 1044(b)(3)(C) Marital Status —
For purposes of this subsection, marital status shall be determined under section
7703.
I.R.C. § 1044(b)(4) Special Rules For C Corporation —
For purposes of this subsection—
I.R.C. § 1044(b)(4)(A) —
all corporations which are members of the same controlled group of corporations
(within the meaning of section 52(a))
shall be treated as 1 taxpayer, and
I.R.C. § 1044(b)(4)(B) —
any gain excluded under subsection
(a) by a predecessor of any C corporation shall be treated as having been excluded
by such C corporation.
I.R.C. § 1044(c) Definitions And Special Rules —
Editor's Note: Pub. L. 115-97, Sec. 13313(a), struck Sec. 1044, effective for sales after December 31, 2017.
For purposes of this section—
I.R.C. § 1044(c)(1) Publicly Traded Securities —
The term “publicly traded securities” means securities which are traded
on an established securities market.
I.R.C. § 1044(c)(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.
I.R.C. § 1044(c)(3) Specialized Small Business Investment Company —
The term “specialized small business investment company” means any partnership
or corporation which is licensed by the Small Business Administration under section
301(d) of the Small Business Investment Act of 1958 (as in effect on May 13, 1993).
I.R.C. § 1044(c)(4) Certain Entities Not Eligible —
This section shall not apply to any estate, trust, partnership, or S corporation.
I.R.C. § 1044(d) Basis Adjustments —
Editor's Note: Pub. L. 115-97, Sec. 13313(a), struck Sec. 1044, effective for sales after December 31, 2017.
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.
(Added Pub. L. 103-66, Sec. 13114(a), Aug. 10, 1993, 107 Stat. 336; amended Pub. L. 104-188, title I, Sec. 1703(a), Aug. 20, 1996, 110 Stat. 1755, repealed by Pub. L. 115-97, title I, Sec. 13313(a), Dec. 22, 2017, 131 Stat. 2054.)
BACKGROUND NOTES
EFFECTIVE DATE
Applicable to sales on and after the date of the enactment of this Act [August 10,
1993], in tax years ending on and after such date.
AMENDMENTS
2017 -
Sec. 1044. Pub. L. 115-97, Sec. 13313(a), repealed Sec. 1044. Before repeal, it read as follows:
“Sec. 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
“(2) any portion of such cost previously taken into account under this section.
“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—
“(A) $50,000, or
“(B) $500,000, reduced by the amount of gain excluded under subsection (a)
for all preceding taxable years.
“(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—
“(A) $250,000, or
“(B) $1,000,000,
“reduced by the amount of gain excluded under subsection (a) for all preceding
taxable years.
“(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.
“(4) Special Rules For C Corporation.—For purposes of this subsection—
“(A) all corporations which are members of the same controlled group of corporations
(within the meaning of section 52(a)) shall be treated as 1 taxpayer, and
“(B) any gain excluded under subsection
(a) by a predecessor of any C corporation shall be treated as having been excluded
by such C corporation.
“(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.
“(3) Specialized Small Business Investment Company.—The term “specialized
small business investment company” means any partnership or corporation which
is licensed by the Small Business Administration under section 301(d) of the Small
Business Investment Act of 1958 (as in effect on May 13, 1993).
“(4) Certain Entities Not Eligible.—This section shall not apply to any
estate, trust, partnership, or S corporation.
“(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.”
1996--Subsec.
(c)(2). Pub. L. 104-188, Sec. 1703(a), amended par. (2). Before amendment, par. (2) read as follows:
“(2)
Purchase. --The term ‘purchase’ has the meaning given such term by section
1043(b)(4).”
EFFECTIVE DATE OF REPEAL
Repeal by Pub. L. 115-97, Sec. 13313(a), effective for sales after December 31, 2017.
EFFECTIVE DATE OF 1996 AMENDMENT
Sec. 1703(o) of Pub. L. 104-188 provided that: “Any amendment made by this section shall take effect as if
included in the provision of the Revenue Reconciliation Act of 1993 to which such
amendment relates.”
