
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1400F]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
                    Subchapter X--Renewal Communities
 
   PART II--RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
 
Sec. 1400F. Renewal community capital gain


(a) General rule

    Gross income does not include any qualified capital gain from the 
sale or exchange of a qualified community asset held for more than 5 
years.

(b) Qualified community asset

    For purposes of this section--

                           (1) In general

        The term ``qualified community asset'' means--
            (A) any qualified community stock,
            (B) any qualified community partnership interest, and
            (C) any qualified community business property.

                    (2) Qualified community stock

        (A) In general

            Except as provided in subparagraph (B), the term ``qualified 
        community stock'' means any stock in a domestic corporation if--
                (i) such stock is acquired by the taxpayer after 
            December 31, 2001, and before January 1, 2010, at its 
            original issue (directly or through an underwriter) from the 
            corporation solely in exchange for cash,
                (ii) as of the time such stock was issued, such 
            corporation was a renewal community business (or, in the 
            case of a new corporation, such corporation was being 
            organized for purposes of being a renewal community 
            business), and
                (iii) during substantially all of the taxpayer's holding 
            period for such stock, such corporation qualified as a 
            renewal community business.

        (B) Redemptions

            A rule similar to the rule of section 1202(c)(3) shall apply 
        for purposes of this paragraph.

            (3) Qualified community partnership interest

        The term ``qualified community partnership interest'' means any 
    capital or profits interest in a domestic partnership if--
            (A) such interest is acquired by the taxpayer after December 
        31, 2001, and before January 1, 2010, from the partnership 
        solely in exchange for cash,
            (B) as of the time such interest was acquired, such 
        partnership was a renewal community business (or, in the case of 
        a new partnership, such partnership was being organized for 
        purposes of being a renewal community business), and
            (C) during substantially all of the taxpayer's holding 
        period for such interest, such partnership qualified as a 
        renewal community business.

    A rule similar to the rule of paragraph (2)(B) shall apply for 
    purposes of this paragraph.

              (4) Qualified community business property

        (A) In general

            The term ``qualified community business property'' means 
        tangible property if--
                (i) such property was acquired by the taxpayer by 
            purchase (as defined in section 179(d)(2)) after December 
            31, 2001, and before January 1, 2010,
                (ii) the original use of such property in the renewal 
            community commences with the taxpayer, and
                (iii) during substantially all of the taxpayer's holding 
            period for such property, substantially all of the use of 
            such property was in a renewal community business of the 
            taxpayer.

        (B) Special rule for substantial improvements

            The requirements of clauses (i) and (ii) of subparagraph (A) 
        shall be treated as satisfied with respect to--
                (i) property which is substantially improved by the 
            taxpayer before January 1, 2010, and
                (ii) any land on which such property is located.

        The determination of whether a property is substantially 
        improved shall be made under clause (ii) of section 
        1400B(b)(4)(B), except that ``December 31, 2001'' shall be 
        substituted for ``December 31, 1997'' in such clause.

(c) Qualified capital gain

    For purposes of this section--

                           (1) In general

        Except as otherwise provided in this subsection, the term 
    ``qualified capital gain'' means any gain recognized on the sale or 
    exchange of--
            (A) a capital asset, or
            (B) property used in the trade or business (as defined in 
        section 1231(b)).

          (2) Gain before 2002 or after 2014 not qualified

        The term ``qualified capital gain'' shall not include any gain 
    attributable to periods before January 1, 2002, or after December 
    31, 2014.

                     (3) Certain rules to apply

        Rules similar to the rules of paragraphs (3), (4), and (5) of 
    section 1400B(e) shall apply for purposes of this subsection.

(d) Certain rules to apply

    For purposes of this section, rules similar to the rules of 
paragraphs (5), (6), and (7) of subsection (b), and subsections (f) and 
(g), of section 1400B shall apply; except that for such purposes section 
1400B(g)(2) shall be applied by substituting ``January 1, 2002'' for 
``January 1, 1998'' and ``December 31, 2014'' for ``December 31, 2008''.

(e) Regulations

    The Secretary shall prescribe such regulations as may be appropriate 
to carry out the purposes of this section, including regulations to 
prevent the abuse of the purposes of this section.

(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec. 21, 
2000, 114 Stat. 2763, 2763A-594.)

                  Section Referred to in Other Sections

    This section is referred to in sections 45D, 1223, 1397B, 1400E of 
this title.
