I.R.C. § 1359(a) In General
If any qualifying vessel operator sells or disposes of any qualifying vessel in
an otherwise taxable transaction, at the election of such operator, no gain shall
be recognized if any replacement qualifying vessel is acquired during the period
specified in subsection (b), except to the extent that the amount realized upon such
sale or disposition exceeds the cost of the replacement qualifying vessel.
I.R.C. § 1359(b) Period Within Which Property Must Be Replaced
The period referred to in subsection (a) shall be the period beginning one year
prior to the disposition of the qualifying vessel and ending—
I.R.C. § 1359(b)(1)
3 years after the close of the first taxable year in which the gain is realized,
I.R.C. § 1359(b)(2)
subject to such terms and conditions as may be specified by the Secretary, on such
later date as the Secretary may designate on application by the taxpayer.
Such application shall be made at such time and in such
manner as the Secretary may by regulations prescribe.
I.R.C. § 1359(c) Application Of Section To Noncorporate Operators
For purposes of this section, the term “qualifying vessel operator” includes any
person who would be a qualifying vessel operator were such person a corporation.
I.R.C. § 1359(d) Time For Assessment Of Deficiency Attributable To Gain
If a qualifying vessel operator has made the election provided in subsection (a),
I.R.C. § 1359(d)(1)
the statutory period for the assessment of any deficiency, for any taxable year
in which any part of the gain is realized, attributable to such gain shall not expire
prior to the expiration of 3 years from the date the Secretary is notified by such
operator (in such manner as the Secretary may by regulations prescribe) of the replacement
qualifying vessel or of an intention not to replace, and
I.R.C. § 1359(d)(2)
such deficiency may be assessed before the expiration of such 3-year period notwithstanding
the provisions of section 6212(c) or the provisions of any other law or rule of law which would otherwise prevent
I.R.C. § 1359(e) Basis Of Replacement Qualifying Vessel
In the case of any replacement qualifying vessel purchased by the qualifying vessel
operator which resulted in the nonrecognition of any part of the gain realized as
the result of a sale or other disposition of a qualifying vessel, the basis shall
be the cost of the replacement qualifying vessel decreased in the amount of the gain
not so recognized; and if the property purchased consists of more than one piece
of property, the basis determined under this sentence shall be allocated to the purchased
properties in proportion to their respective costs.
(Added by Pub. L. 108-357, title II, Sec. 248(a), Oct. 22, 2004, 118 Stat. 1418.)
Effective for taxable years beginning after the date of the enactment of this Act
[Oct. 22, 2004].