26 U.S.C. § 1359 : US Code - Section 1359: Disposition of qualifying vessels

Search 26 U.S.C. § 1359 : US Code - Section 1359: Disposition of qualifying vessels

(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.
(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 -
(1) 3 years after the close of the first taxable year in which
the gain is realized, or
(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.
(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.
(d) Time for assessment of deficiency attributable to gain
If a qualifying vessel operator has made the election provided in
subsection (a), then -
(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
(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 such assessment.
(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.