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Internal Revenue Code · 26 U.S.C.

§ 1359. Disposition of qualifying vessels

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 1359

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
October 22, 2004 by Pub. L. 108–357
Length
5 subsections · 437 words · about 2 min to read
Defines
1 term
Cross-references
cites 1; cited by 0 Code sections and 0 other regulations
(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.

(Added Pub. L. 108–357, title II, § 248(a), Oct. 22, 2004, 118 Stat. 1456.)

Terms defined here

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Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 1 other section

Amendment history

From the source credit and the official notes, newest first.

  1. Added by Pub. L. 108–357

Where it sits in the Code

  1. Subtitle A Income Taxes
  2. Chapter 1 NORMAL TAXES AND SURTAXES
  3. Subchapter R Election To Determine Corporate Tax on Certain International Shipping Activities Using Per Ton Rate

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to taxable years beginning after Oct. 22, 2004, see section 248(c) of Pub. L. 108–357, set out as an Effective Date of 2004 Amendments note under section 56 of this title.