I.R.C. § 1045(a) Nonrecognition Of Gain
In the case of any sale of qualified small business
stock held by a taxpayer other than a corporation for more than 6
months 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—
I.R.C. § 1045(a)(1)
the cost of any qualified small business
stock purchased by the taxpayer during the 60-day period beginning
on the date of such sale, reduced by
I.R.C. § 1045(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 title.
I.R.C. § 1045(b) Definitions And Special Rules
For purposes of this section—
I.R.C. § 1045(b)(1) Qualified Small Business Stock
The term “qualified small business stock”
has the meaning given such term by section 1202(c).
I.R.C. § 1045(b)(2) Purchase
A taxpayer shall be treated as having purchased any
property if, but for paragraph (3), the unadjusted basis of such
property in the hands of the taxpayer would be its cost (within the
meaning of section 1012).
I.R.C. § 1045(b)(3) 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
small business stock which is purchased by the taxpayer during the
60-day period described in subsection (a).
I.R.C. § 1045(b)(4) Holding Period
For purposes of determining whether the nonrecognition
of gain under subsection (a) applies to stock which is sold—
I.R.C. § 1045(b)(4)(A)
the taxpayer's holding period for
such stock and the stock referred to in subsection (a)(1) shall be
determined without regard to section 1223,
I.R.C. § 1045(b)(4)(B)
only the first 6 months of the taxpayer's
holding period for the stock referred to in subsection (a)(1) shall
be taken into account for purposes of applying section 1202(c)(2).
I.R.C. § 1045(b)(5) Certain Rules To Apply
Rules similar to the rules of subsections (f), (g),
(h), (i), (j), and (k) of section 1202 shall
(Added Pub. L. 105-34,
title III, Sec. 313(a), Aug. 5, 1997, 111 Stat. 788; Pub. L. 105-206, title VI, Sec. 6005(f),
July 22, 1998, 112 Stat. 685.)
1998 - Subsec. (a). Pub. L. 105-206, Sec. 6005(f)(1),
amended subsec. (a) by substituting “a taxpayer other than a corporation"
for “an individual” and “such taxpayer” for “such individual”.
Subsec. (b)(5). Pub.
L. 105-206, Sec. 6005(f)(2), amended subsec. (b) by adding
EFFECTIVE DATE OF 1998 AMENDMENTS
Amendments by Sec. 6005(f) of Pub. L. 105-206 effective as if included
in the provisions of the Taxpayer Relief Act of 1997 to which they
relate [Effective Date of Pub. L. 105-34,
Sec. 313: sales after Aug. 5, 1997].
to sales after the date of enactment of this Act [enacted: Aug. 5,