r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“bond” applies in that section

The term “bond” means a bond, debenture, note, or certificate or other evidence of indebtedness. (2) Stripped bond

“coupon” applies in that section

The term “coupon” includes any right to receive interest on a bond (whether or not evidenced by a coupon). (6) Purchase

“purchase” applies in that section

The term “purchase” has the meaning given such term by section 1272(d)(1). 1 (e) Treatment of stripped interests in bond and preferred stock funds, etc. In the case of an account or entity substantially all of the assets of which consist of bonds, preferred stock, or a combination thereof, the Secretary may by regulations provide that rules similar to the rules of this section and section 305(e), as appropriate, shall apply to interests in such account or entity to which (but for this subsection) this section or section 305(e), as the case may be, would not apply.

“stated redemption price at maturity” applies in that section

The term “stated redemption price at maturity” has the meaning given such term by section 1273(a)(2). (5) Coupon

“stripped bond” applies in that section

The term “stripped bond” means a bond issued at any time with interest coupons where there is a separation in ownership between the bond and any coupon which has not yet become payable. (3) Stripped coupon

“stripped coupon” applies in that section

The term “stripped coupon” means any coupon relating to a stripped bond. (4) Stated redemption price at maturity

“registered form” applies in that section

The term “registered form” has the same meaning as when used in section 163(f).

“registration-required obligation” applies in that section

The term “registration-required obligation” has the meaning given to such term by section 163(f)(2). (2) Registered form

“original issue discount” applies in that section

The term “original issue discount” has the meaning given to such term by section 1273(a) without regard to paragraph (3) thereof. In applying section 483 or 1274, under regulations prescribed by the Secretary, appropriate adjustments shall be made to the applicable Federal rate to take into account the tax exemption for interest on the obligation. (2) Tax-exempt obligation

“tax-exempt obligation” applies in that section

The term “tax-exempt obligation” has the meaning given to such term by section 1275(a)(3). (3) Short-term obligations In applying this section to obligations with maturity of 1 year or less, rules similar to the rules of section 1283(b) shall apply.

“creditable foreign taxes” applies in that section

The term “creditable foreign taxes” means, with respect to any distribution, any withholding tax imposed with respect to such distribution, but only if the taxpayer chooses the benefits of section 901 and such taxes are creditable under section 901 (determined without regard to paragraph (1)(C)(ii)). (B) Excess distribution taxes

“current year” applies in that section

The term “current year” means the taxable year in which the excess distribution or disposition occurs. (b) Excess distribution (1) In general For purposes of this section,

“deferred tax amount” applies in that section

The term “deferred tax amount” means, with respect to any distribution or disposition to which subsection (a) applies, an amount equal to the sum of— (A) the aggregate increases in taxes described in paragraph (2), plus (B) the aggregate amount of interest (determined in the manner provided under paragraph (3)) on such increases in tax. Any increase in the tax imposed by this chapter for the current year under subsection (a) to the extent attributable to the amount referred to in subparagraph (B) shall be treated as interest paid under section 6601 on the due date for the current year.

“due date” applies in that section

the term “due date” means the date prescribed by law (determined without regard to extensions) for filing the return of the tax imposed by this chapter for the taxable year. (d) Coordination with subparts B and C (1) In general This section shall not apply with respect to any distribution paid by a passive foreign investment company, or any disposition of stock in a passive foreign investment company, if such company is a qualified electing fund with respect to the taxpayer for each of its taxable years— (A) which begins after December 31, 1986 , and for which such company is a passive foreign investment company, and (B) which includes any portion of the taxpayer’s holding period.

“excess distribution” applies in that section

the term “excess distribution” means any distribution in respect of stock received during any taxable year to the extent such distribution does not exceed its ratable portion of the total excess distribution (if any) for such taxable year. (2) Total excess distribution For purposes of this subsection— (A) In general

“excess distribution taxes” applies in that section

The term “excess distribution taxes” means, with respect to any distribution, the portion of the creditable foreign taxes with respect to such distribution which is attributable (on a pro rata basis) to the portion of such distribution which is an excess distribution. (C) Section 1248 gain The rules of this subsection also shall apply in the case of any gain which but for this section would be includible in gross income as a dividend under section 1248.

“post-1986 earnings and profits” applies in that section

the term “post-1986 earnings and profits” means earnings and profits which were accumulated in taxable years of such company beginning after December 31, 1986 , and during the period or periods the stock was held by the taxpayer while the company was a passive foreign investment company. (iii) Coordination with section 959(e) For purposes of section 959(e), any amount included in gross income under this subparagraph shall be treated as included in gross income under section 1248(a).

“total excess distribution” applies in that section

The term “total excess distribution” means the excess (if any) of— (i) the amount of the distributions in respect of the stock received by the taxpayer during the taxable year, over (ii) 125 percent of the average amount received in respect of such stock by the taxpayer during the 3 preceding taxable years (or, if shorter, the portion of the taxpayer’s holding period before the taxable year). For purposes of clause (ii), any excess distribution received during such 3-year period shall be taken into account only to the extent it was included in gross income under subsection (a)(1)(B).

“ordinary earnings” applies in that section

The term “ordinary earnings” means the excess of the earnings and profits of the qualified electing fund for the taxable year over its net capital gain for such taxable year. (2) Limitation on net capital gain A qualified electing fund’s net capital gain for any taxable year shall not exceed its earnings and profits for such taxable year. (3) Determination of earnings and profits The earnings and profits of any qualified electing fund shall be determined without regard to paragraphs (4), (5), and (6) of section 312(n).

“undistributed earnings” applies in that section

The term “undistributed earnings” means, with respect to any qualified electing fund, the excess (if any) of— (A) the amount includible in gross income by reason of section 1293(a) for the taxable year, over (B) the amount not includible in gross income by reason of section 1293(c) for such taxable year.

“undistributed PFIC earnings tax liability” applies in that section

The term “undistributed PFIC earnings tax liability” means, in the case of any taxpayer, the excess of— (A) the tax imposed by this chapter for the taxable year, over (B) the tax which would be imposed by this chapter for such year without regard to the inclusion in gross income under section 1293 of the undistributed earnings of a qualified electing fund. (2) Undistributed earnings

“marketable stock” applies in that section

The term “marketable stock” means— (A) any stock which is regularly traded on— (i) a national securities exchange which is registered with the Securities and Exchange Commission or the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (ii) any exchange or other market which the Secretary determines has rules adequate to carry out the purposes of this part, (B) to the extent provided in regulations, stock in any foreign corporation which is comparable to a regulated investment company and which offers for sale or has outstanding any stock of which it is the issuer and which is redeemable at its net asset value, and (C) to the extent …

“unreversed inclusions” applies in that section

the term “unreversed inclusions” means, with respect to any stock in a passive foreign investment company, the excess (if any) of— (1) the amount included in gross income of the taxpayer under subsection (a)(1) with respect to such stock for prior taxable years, over (2) the amount allowed as a deduction under subsection (a)(2) with respect to such stock for prior taxable years. The amount referred to in paragraph (1) shall include any amount which would have been included in gross income under subsection (a)(1) with respect to such stock for any prior taxable year but for section 1291.

“applicable financial statement” applies in that section

The term “applicable financial statement” means a statement for financial reporting purposes which— (i) is made on the basis of generally accepted accounting principles, (ii) is made on the basis of international financial reporting standards, but only if there is no statement that meets the requirement of clause (i), or (iii) except as otherwise provided by the Secretary in regulations, is the annual statement which is required to be filed with the applicable insurance regulatory body, but only if there is no statement which meets the requirements of clause (i) or (ii). (B) Applicable insurance regulatory body

“applicable insurance liabilities” applies in that section

The term “applicable insurance liabilities” means, with respect to any life or property and casualty insurance business— (i) loss and loss adjustment expenses, and (ii) reserves (other than deficiency, contingency, or unearned premium reserves) for life and health insurance risks and life and health insurance claims with respect to contracts providing coverage for mortality or morbidity risks.

“applicable insurance regulatory body” applies in that section

The term “applicable insurance regulatory body” means, with respect to any insurance business, the entity established by law to license, authorize, or regulate such business and to which the statement described in subparagraph (A) is provided.

“passive foreign investment company” applies throughout its subpart

the term “passive foreign investment company” means any foreign corporation if— (1) 75 percent or more of the gross income of such corporation for the taxable year is passive income, or (2) the average percentage of assets (as determined in accordance with subsection (e)) held by such corporation during the taxable year which produce passive income or which are held for the production of passive income is at least 50 percent. (b) Passive income For purposes of this section— (1) In general Except as provided in paragraph (2),

“passive income” applies in that section

the term “passive income” means any income which is of a kind which would be foreign personal holding company income as defined in section 954(c). (2) Exceptions Except as provided in regulations, the term “passive income” does not include any income— (A) derived in the active conduct of a banking business by an institution licensed to do business as a bank in the United States (or, to the extent provided in regulations, by any other corporation), (B) derived in the active conduct of an insurance business by a qualifying insurance corporation (as defined in subsection (f)), (C) which is interest, a dividend, or a rent or royalty, which is received or accrued from a related person (within …

“qualified portion” applies in that section

the term “qualified portion” means the portion of the shareholder’s holding period— (A) which is after December 31, 1997 , and (B) during which the shareholder is a United States shareholder (as defined in section 951(b)) of the corporation and the corporation is a controlled foreign corporation. (3) New holding period if qualified portion ends (A) In general Except as provided in subparagraph (B), if the qualified portion of a shareholder’s holding period with respect to any stock ends after December 31, 1997 , solely for purposes of this part, the shareholder’s holding period with respect to such stock shall be treated as beginning as of the first day following such period.

“qualifying insurance corporation” applies in that section

The term “qualifying insurance corporation” means, with respect to any taxable year, a foreign corporation— (A) which would be subject to tax under subchapter L if such corporation were a domestic corporation, and (B) the applicable insurance liabilities of which constitute more than 25 percent of its total assets, determined on the basis of such liabilities and assets as reported on the corporation’s applicable financial statement for the last year ending with or within the taxable year.

“related person” applies in that section

the term “related person” has the meaning given such term by section 954(d)(3) determined by substituting “foreign corporation” for “controlled foreign corporation” each place it appears in section 954(d)(3).

“controlled foreign corporation” applies in that section

the term “controlled foreign corporation” has the meaning given such term by section 957(a). (f) Reporting requirement Except as otherwise provided by the Secretary, each United States person who is a shareholder of a passive foreign investment company shall file an annual report containing such information as the Secretary may require. (g) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part.

“qualified stock” applies in that section

the term “qualified stock” means any stock in a C corporation which is a domestic corporation and which is not a regulated investment company or real estate investment trust. (8) Treatment of certain subpart F inclusions Any amount included in gross income under section 951(a)(1)(B) shall be treated as a distribution received with respect to the stock.

“elected farm income” applies in that section

The term “elected farm income” means so much of the taxable income for the taxable year— (i) which is attributable to any farming business or fishing business; and (ii) which is specified in the election under subsection (a). (B) Treatment of gains For purposes of subparagraph (A), gain from the sale or other disposition of property (other than land) regularly used by the taxpayer in such a farming business or fishing business for a substantial period shall be treated as attributable to such a farming business or fishing business. (2) Individual The term “individual” shall not include any estate or trust. (3) Farming business

“farming business” applies in that section

The term “farming business” has the meaning given such term by section 263A(e)(4). (4) Fishing business

“fishing business” applies in that section

The term “fishing business” means the conduct of commercial fishing as defined in section 3 of the Magnuson-Stevens Fishery Conservation and Management Act ( 16 U.S.C. 1802 ). (c) Regulations The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations regarding— (1) the order and manner in which items of income, gain, deduction, or loss, or limitations on tax, shall be taken into account in computing the tax imposed by this chapter on the income of any taxpayer to whom this section applies for any taxable year, and (2) the treatment of any short taxable year.

“determination” applies throughout its part

the term “determination” means— (1) a decision by the Tax Court or a judgment, decree, or other order by any court of competent jurisdiction, which has become final; (2) a closing agreement made under section 7121; (3) a final disposition by the Secretary of a claim for refund.

“related taxpayer” applies throughout its part

the term “related taxpayer” means a taxpayer who, with the taxpayer with respect to whom a determination is made, stood, in the taxable year with respect to which the erroneous inclusion, exclusion, omission, allowance, or disallowance was made, in one of the following relationships: (1) husband and wife, (2) grantor and fiduciary, (3) grantor and beneficiary, (4) fiduciary and beneficiary, legatee, or heir, (5) decedent and decedent’s estate, (6) partner, or (7) member of an affiliated group of corporations (as defined in section 1504).

“taxpayer” applies throughout its part

the term “taxpayer” means any person subject to a tax under the applicable revenue law. (c) Related taxpayer For purposes of this part,

“foreign expropriation loss” applies in that section

the term “foreign expropriation loss” means any loss sustained by reason of the expropriation, intervention, seizure, or similar taking of property by the government of any foreign country, any political subdivision thereof, or any agency or instrumentality of the foregoing. For purposes of the preceding sentence, a debt which becomes worthless shall, to the extent of any deduction allowed under section 166(a), be treated as a loss. (c) Amount of recovery (1) General rule The amount of any recovery of a foreign expropriation loss is the amount of money and the fair market value of other property received in respect of such loss, determined as of the date of receipt.

“controlled group” applies throughout its subchapter

The term “controlled group” means any group which would be treated as a single employer under subsection (a) or (b) of section 52 if paragraphs (1) and (2) of section 52(a) did not apply. (3) Qualifying vessel operator

“electing corporation” applies throughout its subchapter

The term “electing corporation” means any corporation for which an election is in effect under this subchapter. (2) Electing group; controlled group (A) Electing group

“electing group” applies throughout its subchapter

The term “electing group” means a controlled group of which one or more members is an electing corporation. (B) Controlled group

“qualified zone” applies in that section

The term “qualified zone” means the Great Lakes Waterway and the St. Lawrence Seaway. (h) Regulations The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

“qualified zone domestic trade” applies in that section

The term “qualified zone domestic trade” means the transportation of goods or passengers between places in the qualified zone if such transportation is in the United States domestic trade. (B) Qualified zone

“qualifying vessel” applies throughout its subchapter

The term “qualifying vessel” means a self-propelled (or a combination self-propelled and non-self-propelled) United States flag vessel of not less than 6,000 deadweight tons used exclusively in the United States foreign trade during the period that the election under this subchapter is in effect. (5) United States flag vessel

“qualifying vessel operator” applies throughout its subchapter

The term “qualifying vessel operator” means any corporation— (A) who operates one or more qualifying vessels, and (B) who meets the shipping activity requirement in subsection (c). (4) Qualifying vessel

“United States domestic trade” applies throughout its subchapter

The term “United States domestic trade” means the transportation of goods or passengers between places in the United States. (7) United States foreign trade

“United States flag vessel” applies throughout its subchapter

The term “United States flag vessel” means any vessel documented under the laws of the United States. (6) United States domestic trade

“United States foreign trade” applies throughout its subchapter

The term “United States foreign trade” means the transportation of goods or passengers between a place in the United States and a foreign place or between foreign places. (b) Operating a vessel For purposes of this subchapter— (1) In general Except as provided in paragraph (2), a person is treated as operating any vessel during any period if— (A) (i) such vessel is owned by, or chartered (including a time charter) to, the person, or (ii) the person provides services for such vessel pursuant to an operating agreement, and (B) such vessel is in use as a qualifying vessel during such period.

“core qualifying activities” applies throughout its subchapter

the term “core qualifying activities” means activities in operating qualifying vessels in United States foreign trade. (c) Qualifying secondary activities For purposes of this section— (1) In general

“qualified incidental activities” applies in that section

the term “qualified incidental activities” means shipping-related activities if— (1) they are incidental to the corporation’s core qualifying activities, (2) they are not qualifying secondary activities, and (3) without regard to this subchapter, the gross income derived by such corporation from such activities does not exceed 0.1 percent of the corporation’s gross income from its core qualifying activities. (e) Application of gross income tests in case of electing group In the case of an electing group, subsections (c)(1) and (d)(3) shall be applied as if such group were 1 entity, and the limitations under such subsections shall be allocated among the corporations in such group.

“qualifying secondary activities” applies in that section

The term “qualifying secondary activities” means secondary activities but only to the extent that, without regard to this subchapter, the gross income derived by such corporation from such activities does not exceed 20 percent of the gross income derived by the corporation from its core qualifying activities. (2) Secondary activities

“qualifying shipping activities” applies throughout its subchapter

the term “qualifying shipping activities” means— (1) core qualifying activities, (2) qualifying secondary activities, and (3) qualifying incidental activities. (b) Core qualifying activities For purposes of this subchapter,

“secondary activities” applies in that section

The term “secondary activities” means— (A) the active management or operation of vessels other than qualifying vessels in the United States foreign trade, (B) the provision of vessel, barge, container, or cargo-related facilities or services to any person, (C) other activities of the electing corporation and other members of its electing group that are an integral part of its business of operating qualifying vessels in United States foreign trade, including— (i) ownership or operation of barges, containers, chassis, and other equipment that are the complement of, or used in connection with, a qualifying vessel in United States foreign trade, (ii) the inland haulage of cargo shipped, or to …

“qualifying vessel operator” applies in that 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 …

“applicable date” applies in that section

The term “applicable date” means the latest of— (I) the date the election under section 1362(a) is made, (II) the earliest date that an individual described in clause (i) holds stock in the S corporation, or (III) October 22, 2004 . (C) Effect of adoption, etc. Any legally adopted child of an individual, any child who is lawfully placed with an individual for legal adoption by the individual, and any eligible foster child of an individual (within the meaning of section 152(f)(1)(C)), shall be treated as a child of such individual by blood.

“C corporation” applies throughout this title

the term “C corporation” means, with respect to any taxable year, a corporation which is not an S corporation for such year. (b) Small business corporation (1) In general For purposes of this subchapter,

“electing small business trust” applies in that section

the term “electing small business trust” means any trust if— (i) such trust does not have as a beneficiary any person other than (I) an individual, (II) an estate, (III) an organization described in paragraph (2), (3), (4), or (5) of section 170(c), or (IV) an organization described in section 170(c)(1) which holds a contingent interest in such trust and is not a potential current beneficiary, (ii) no interest in such trust was acquired by purchase, and (iii) an election under this subsection applies to such trust.

“estate” applies in that section

the term “estate” includes the estate of an individual in a case under title 11 of the United States Code. (4) Differences in common stock voting rights disregarded For purposes of subsection (b)(1)(D), a corporation shall not be treated as having more than 1 class of stock solely because there are differences in voting rights among the shares of common stock. (5) Straight debt safe harbor (A) In general For purposes of subsection (b)(1)(D), straight debt shall not be treated as a second class of stock. (B) Straight debt defined For purposes of this paragraph,

“ineligible corporation” applies throughout its subchapter

the term “ineligible corporation” means any corporation which is— (A) a financial institution which uses the reserve method of accounting for bad debts described in section 585, (B) an insurance company subject to tax under subchapter L, or (C) a DISC or former DISC.

“members of a family” applies in that section

The term “members of a family” means a common ancestor, any lineal descendant of such common ancestor, and any spouse or former spouse of such common ancestor or any such lineal descendant. (ii) Common ancestor An individual shall not be considered to be a common ancestor if, on the applicable date, the individual is more than 6 generations removed from the youngest generation of shareholders who would (but for this subparagraph) be members of the family. For purposes of the preceding sentence, a spouse (or former spouse) shall be treated as being of the same generation as the individual to whom such spouse is (or was) married. (iii) Applicable date

“potential current beneficiary” applies in that section

the term “potential current beneficiary” means, with respect to any period, any person who at any time during such period is entitled to, or at the discretion of any person may receive, a distribution from the principal or income of the trust (determined without regard to any power of appointment to the extent such power remains unexercised at the end of such period). If a trust disposes of all of the stock which it holds in an S corporation, then, with respect to such corporation, the term “potential current beneficiary” does not include any person who first met the requirements of the preceding sentence during the 1-year period ending on the date of such disposition.

“purchase” applies in that section

the term “purchase” means any acquisition if the basis of the property acquired is determined under section 1012. (2) Potential current beneficiary For purposes of this section,

“qualified subchapter S subsidiary” applies in that section

the term “qualified subchapter S subsidiary” means any domestic corporation which is not an ineligible corporation (as defined in paragraph (2)), if— (i) 100 percent of the stock of such corporation is held by the S corporation, and (ii) the S corporation elects to treat such corporation as a qualified subchapter S subsidiary.

“qualified subchapter S trust” applies in that section

the term “qualified subchapter S trust” means a trust— (A) the terms of which require that— (i) during the life of the current income beneficiary, there shall be only 1 income beneficiary of the trust, (ii) any corpus distributed during the life of the current income beneficiary may be distributed only to such beneficiary, (iii) the income interest of the current income beneficiary in the trust shall terminate on the earlier of such beneficiary’s death or the termination of the trust, and (iv) upon the termination of the trust during the life of the current income beneficiary, the trust shall distribute all of its assets to such beneficiary, and (B) all of the income (within the meaning of …

“restricted bank director stock” applies in that section

the term “restricted bank director stock” means stock in a bank (as defined in section 581) or a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act ( 12 U.S.C.

“S corporation” applies throughout this title

the term “S corporation” means, with respect to any taxable year, a small business corporation for which an election under section 1362(a) is in effect for such year. (2) C corporation For purposes of this title,

“small business corporation” applies throughout its subchapter

the term “small business corporation” means a domestic corporation which is not an ineligible corporation and which does not— (A) have more than 100 shareholders, (B) have as a shareholder a person (other than an estate, a trust described in subsection (c)(2), or an organization described in subsection (c)(6)) who is not an individual, (C) have a nonresident alien as a shareholder, and (D) have more than 1 class of stock. (2) Ineligible corporation defined For purposes of paragraph (1),

“straight debt” applies in that section

the term “straight debt” means any written unconditional promise to pay on demand or on a specified date a sum certain in money if— (i) the interest rate (and interest payment dates) are not contingent on profits, the borrower’s discretion, or similar factors, (ii) there is no convertibility (directly or indirectly) into stock, and (iii) the creditor is an individual (other than a nonresident alien), an estate, a trust described in paragraph (2), or a person which is actively and regularly engaged in the business of lending money.

“passive investment income” applies in that section

the term “passive investment income” means gross receipts derived from royalties, rents, dividends, interest, and annuities. (ii) Exception for interest on notes from sales of inventory The term “passive investment income” shall not include interest on any obligation acquired in the ordinary course of the corporation’s trade or business from its sale of property described in section 1221(a)(1).

“S termination year” applies in that section

the term “S termination year” means any taxable year of a corporation (determined without regard to this subsection) in which a termination of an election made under subsection (a) takes effect (other than on the 1st day thereof). (5) Tax for C short year determined on annualized basis (A) In general The taxable income for the short year described in subparagraph (B) of paragraph (1) shall be placed on an annual basis by multiplying the taxable income for such short year by the number of days in the S termination year and by dividing the result by the number of days in the short year.

“inventory assets” applies in that section

The term “inventory assets” means stock in trade of the corporation, or other property of a kind which would properly be included in the inventory of the corporation if on hand at the close of the taxable year. (C) Method of determining inventory amount The inventory amount of assets under a method authorized by section 471 shall be determined— (i) if the corporation uses the retail method of valuing inventories under section 472, by using such method, or (ii) if clause (i) does not apply, by using cost or market, whichever is lower.

“LIFO method” applies in that section

The term “LIFO method” means the method authorized by section 472. (B) Inventory assets

“LIFO recapture amount” applies in that section

the term “LIFO recapture amount” means the amount (if any) by which— (A) the inventory amount of the inventory asset under the first-in, first-out method authorized by section 471, exceeds (B) the inventory amount of such assets under the LIFO method. For purposes of the preceding sentence, inventory amounts shall be determined as of the close of the last taxable year referred to in paragraph (1). (4) Other definitions For purposes of this subsection— (A) LIFO method

“nonseparately computed income or loss” applies throughout its subchapter

the term “nonseparately computed income or loss” means gross income minus the deductions allowed to the corporation under this chapter, determined by excluding all items described in paragraph (1)(A). (b) Character passed thru The character of any item included in a shareholder’s pro rata share under paragraph (1) of subsection (a) shall be determined as if such item were realized directly from the source from which realized by the corporation, or incurred in the same manner as incurred by the corporation.

“accumulated adjustments account” applies in that section

the term “accumulated adjustments account” means an account of the S corporation which is adjusted for the S period in a manner similar to the adjustments under section 1367 (except that no adjustment shall be made for income (and related expenses) which is exempt from tax under this title and the phrase “(but not below zero)” shall be disregarded in section 1367(a)(2)) and no adjustment shall be made for Federal taxes attributable to any taxable year in which the corporation was a C corporation.

“affected shareholder” applies in that section

the term “affected shareholder” means any shareholder to whom a distribution is made by the S corporation during the taxable year. (f) Restricted bank director stock If a director receives a distribution (not in part or full payment in exchange for stock) from an S corporation with respect to any restricted bank director stock (as defined in section 1361(f)), the amount of such distribution— (1) shall be includible in gross income of the director, and (2) shall be deductible by the corporation for the taxable year of such corporation in which or with which ends the taxable year in which such amount is included in the gross income of the director.

“net negative adjustment” applies in that section

the term “net negative adjustment” means, with respect to any taxable year, the excess (if any) of— (I) the reductions in the account for the taxable year (other than for distributions), over (II) the increases in such account for such taxable year. (2) S period

“S period” applies in that section

The term “S period” means the most recent continuous period during which the corporation has been an S corporation. Such period shall not include any taxable year beginning before January 1, 1983 . (3) Election to distribute earnings first (A) In general An S corporation may, with the consent of all of its affected shareholders, elect to have paragraph (1) of subsection (c) not apply to all distributions made during the taxable year for which the election is made. (B) Affected shareholder For purposes of subparagraph (A),

“2-percent shareholder” applies in that section

the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.

“net recognized built-in gain” applies in that section

The term “net recognized built-in gain” means, with respect to any taxable year in the recognition period, the lesser of— (i) the amount which would be the taxable income of the S corporation for such taxable year if only recognized built-in gains and recognized built-in losses were taken into account, or (ii) such corporation’s taxable income for such taxable year (determined as provided in section 1375(b)(1)(B)).

“net unrealized built-in gain” applies in that section

The term “net unrealized built-in gain” means the amount (if any) by which— (A) the fair market value of the assets of the S corporation as of the beginning of its 1st taxable year for which an election under section 1362(a) is in effect, exceeds (B) the aggregate adjusted bases of such assets at such time. (2) Net recognized built-in gain (A) In general

“recognition period” applies in that section

The term “recognition period” means the 5-year period beginning with the 1st day of the 1st taxable year for which the corporation was an S corporation. For purposes of applying this section to any amount includible in income by reason of distributions to shareholders pursuant to section 593(e), the preceding sentence shall be applied without regard to the phrase “5-year”. (B) Installment sales If an S corporation sells an asset and reports the income from the sale using the installment method under section 453, the treatment of all payments received shall be governed by the provisions of this paragraph applicable to the taxable year in which such sale was made.

“recognized built-in gain” applies in that section

The term “recognized built-in gain” means any gain recognized during the recognition period on the disposition of any asset except to the extent that the S corporation establishes that— (A) such asset was not held by the S corporation as of the beginning of the 1st taxable year for which it was an S corporation, or (B) such gain exceeds the excess (if any) of— (i) the fair market value of such asset as of the beginning of such 1st taxable year, over (ii) the adjusted basis of the asset as of such time. (4) Recognized built-in losses

“recognized built-in loss” applies in that section

The term “recognized built-in loss” means any loss recognized during the recognition period on the disposition of any asset to the extent that the S corporation establishes that— (A) such asset was held by the S corporation as of the beginning of the 1st taxable year referred to in paragraph (3), and (B) such loss does not exceed the excess of— (i) the adjusted basis of such asset as of the beginning of such 1st taxable year, over (ii) the fair market value of such asset as of such time.

“excess net passive income” applies in that section

the term “excess net passive income” means an amount which bears the same ratio to the net passive income for the taxable year as— (i) the amount by which the passive investment income for the taxable year exceeds 25 percent of the gross receipts for the taxable year, bears to (ii) the passive investment income for the taxable year.

“net passive income” applies in that section

The term “net passive income” means— (A) passive investment income, reduced by (B) the deductions allowable under this chapter which are directly connected with the production of such income (other than deductions allowable under section 172 and part VIII of subchapter B). (3) Passive investment income, etc. The terms “passive investment income” and “gross receipts” have the same respective meanings as when used in paragraph (3) of section 1362(d).

“affected shareholders” applies throughout its subchapter

the term “affected shareholders” means the shareholder whose interest is terminated and all shareholders to whom such shareholder has transferred shares during the taxable year. If such shareholder has transferred shares to the corporation,

“determination” applies throughout its subchapter

the term “determination” means— (A) a determination as defined in section 1313(a), or (B) an agreement between the corporation and the Secretary that the corporation failed to qualify as an S corporation. (3) Special rules for audit related post-termination transition periods (A) No application to carryovers Paragraph (1)(B) shall not apply for purposes of section 1366(d)(3).

“post-termination transition period” applies throughout its subchapter

the term “post-termination transition period” means— (A) the period beginning on the day after the last day of the corporation’s last taxable year as an S corporation and ending on the later of— (i) the day which is 1 year after such last day, or (ii) the due date for filing the return for such last year as an S corporation (including extensions), (B) the 120-day period beginning on the date of any determination pursuant to an audit of the taxpayer which follows the termination of the corporation’s election and which adjusts a subchapter S item of income, loss, or deduction of the corporation arising during the S period (as defined in section 1368(e)(2)), and (C) the 120-day period …

“permitted year” applies in that section

the term “permitted year” means a taxable year which— (1) is a year ending December 31, or (2) is any other accounting period for which the corporation establishes a business purpose to the satisfaction of the Secretary. For purposes of paragraph (2), any deferral of income to shareholders shall not be treated as a business purpose.

“1st postenactment year” applies in that section

The term “1st postenactment year” means the 1st taxable year of a corporation which begins after December 31, 1982 .

“last preenactment year” applies in that section

The term “last preenactment year” means the last taxable year of a corporation which begins before January 1, 1983 . (2) 1st postenactment year

“completed crop pool method of accounting” applies in that section

the term “completed crop pool method of accounting” means a method of accounting under which gain or loss is computed separately for each crop year pool in the year in which the last of the products in the pool are disposed of.

“nonqualified per-unit retain certificate” applies throughout its subchapter

the term “nonqualified per-unit retain certificate” means a per-unit retain certificate which is not described in subsection (h). (j) Special rules for the netting of gains and losses by cooperatives For purposes of this subchapter, in the case of any organization to which part I of this subchapter applies— (1) Optional netting of patronage gains and losses permitted The net earnings of such organization may, at its option, be determined by offsetting patronage losses (including any patronage loss carried to such year) which are attributable to 1 or more allocation units (whether such units are functional, divisional, departmental, geographic, or otherwise) against patronage earnings of 1 …

“nonqualified written notice of allocation” applies throughout its subchapter

the term “nonqualified written notice of allocation” means a written notice of allocation which is not described in subsection (c) or a qualified check which is not cashed on or before the 90th day after the close of the payment period for the taxable year for which the distribution of which it is a part is paid.

“patronage dividend” applies throughout its subchapter

the term “patronage dividend” means an amount paid to a patron by an organization to which part I of this subchapter applies— (1) on the basis of quantity or value of business done with or for such patron, (2) under an obligation of such organization to pay such amount, which obligation existed before the organization received the amount so paid, and (3) which is determined by reference to the net earnings of the organization from business done with or for its patrons.

“patronage earnings” applies in that section

the terms “patronage earnings” and “patronage losses” means 1 earnings and losses, respectively, which are derived from business done with or for patrons of the organization. (k) Cooperative marketing includes value-added processing involving animals For purposes of section 521 and this subchapter, the marketing of the products of members or other producers shall include the feeding of such products to cattle, hogs, fish, chickens, or other animals and the sale of the resulting animals or animal products.

“patronage losses” applies in that section

the terms “patronage earnings” and “patronage losses” means 1 earnings and losses, respectively, which are derived from business done with or for patrons of the organization. (k) Cooperative marketing includes value-added processing involving animals For purposes of section 521 and this subchapter, the marketing of the products of members or other producers shall include the feeding of such products to cattle, hogs, fish, chickens, or other animals and the sale of the resulting animals or animal products.

“per-unit retain allocation” applies throughout its subchapter

the term “per-unit retain allocation” means any allocation, by an organization to which part I of this subchapter applies, to a patron with respect to products marketed for him, the amount of which is fixed without reference to the net earnings of the organization pursuant to an agreement between the organization and the patron. (g) Per-unit retain certificate For purposes of this subchapter,

“per-unit retain certificate” applies throughout its subchapter

the term “per-unit retain certificate” means any written notice which discloses to the recipient the stated dollar amount of a per-unit retain allocation to him by the organization. (h) Qualified per-unit retain certificate (1) Defined For purposes of this subchapter,

“qualified check” applies throughout its subchapter

the term “qualified check” means only a check (or other instrument which is redeemable in money) which is paid as a part of a patronage dividend, or as a part of a payment described in section 1382(c)(2)(A), to a distributee who has not given consent as provided in paragraph (2)(A) or (B) with respect to such patronage dividend or payment, and on which there is clearly imprinted a statement that the endorsement and cashing of the check (or other instrument) constitutes the consent of the payee to include in his gross income, as provided in the Federal income tax laws, the stated dollar amount of the written notice of allocation which is a part of the patronage dividend or payment of which …

“qualified per-unit retain certificate” applies throughout its subchapter

the term “qualified per-unit retain certificate” means any per-unit retain certificate which the distributee has agreed, in the manner provided in paragraph (2), to take into account at its stated dollar amount as provided in section 1385(a).

“qualified written notice of allocation” applies throughout its subchapter

the term “qualified written notice of allocation” means— (A) a written notice of allocation which may be redeemed in cash at its stated dollar amount at any time within a period beginning on the date such written notice of allocation is paid and ending not earlier than 90 days from such date, but only if the distributee receives written notice of the right of redemption at the time he receives such written notice of allocation; and (B) a written notice of allocation which the distributee has consented, in the manner provided in paragraph (2), to take into account at its stated dollar amount as provided in section 1385(a).

“written notice of allocation” applies throughout its subchapter

the term “written notice of allocation” means any capital stock, revolving fund certificate, retain certificate, certificate of indebtedness, letter of advice, or other written notice, which discloses to the recipient the stated dollar amount allocated to him by the organization and the portion thereof, if any, which constitutes a patronage dividend. (c) Qualified written notice of allocation (1) Defined For purposes of this subchapter,

“appropriate Secretary” applies throughout its subchapter

The term “appropriate Secretary” means— (A) the Secretary of Housing and Urban Development in the case of any nominated area which is located in an urban area, and (B) the Secretary of Agriculture in the case of any nominated area which is located in a rural area. (2) Rural area

“empowerment zone” applies throughout this title

the terms “empowerment zone” and “enterprise community” mean areas designated as such under section 1391.

“enterprise community” applies throughout this title

the terms “empowerment zone” and “enterprise community” mean areas designated as such under section 1391.

“Indian reservation” applies throughout its subchapter

The term “Indian reservation” has the meaning given such term by section 168(j)(6). (5) Local government

“local government” applies throughout its subchapter

The term “local government” means— (A) any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and (B) any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary. (6) Nominated area

“nominated area” applies throughout its subchapter

The term “nominated area” means an area which is nominated by 1 or more local governments and the State or States in which it is located for designation under section 1391. (7) Governments If more than 1 State or local government seeks to nominate an area under this part, any reference to, or requirement of, this subchapter shall apply to all such governments. (8) Special rule An area shall be treated as nominated by a State and a local government if it is nominated by an economic development corporation chartered by the State. (9) Use of census data Population and poverty rate shall be determined by the most recent decennial census data available.

“rural area” applies throughout its subchapter

The term “rural area” means any area which is— (A) outside of a metropolitan statistical area (within the meaning of section 143(k)(2)(B)), or (B) determined by the Secretary of Agriculture, after consultation with the Secretary of Commerce, to be a rural area. (3) Urban area

“urban area” applies throughout its subchapter

The term “urban area” means an area which is not a rural area. (4) Special rules for Indian reservations (A) In general No empowerment zone or enterprise community may include any area within an Indian reservation. (B) Indian reservation defined

“applicable nominating jurisdiction” applies in that section

The term “applicable nominating jurisdiction” means, with respect to any empowerment zone or enterprise community, any local government that nominated such community for designation under section 1391. (E) Portions of business may be enterprise zone business

“empowerment zone facility bond” applies in that section

the term “empowerment zone facility bond” means any bond which would be described in subsection (a) if— (A) in the case of obligations issued before January 1, 2002 , only empowerment zones designated under section 1391(g) were taken into account under sections 1397C and 1397D, and (B) in the case of obligations issued after December 31, 2001 , all empowerment zones (other than the District of Columbia Enterprise Zone) were taken into account under sections 1397C and 1397D.

“enterprise zone business” applies in that section

the term “enterprise zone business” has the meaning given such term by section 1397C. (B) Modifications In applying section 1397C for purposes of this section— (i) Businesses in enterprise communities eligible (I) In general Except as provided in subclause (II), references in section 1397C to empowerment zones shall be treated as including references to enterprise communities.

“enterprise zone facility” applies in that section

The term “enterprise zone facility” means any qualified zone property the principal user of which is an enterprise zone business, and any land which is functionally related and subordinate to such property. (2) Qualified zone property

“exempt facility bond” applies in that section

the term “exempt facility bond” includes any bond issued as part of an issue 95 percent or more of the net proceeds (as defined in section 150(a)(3)) of which are to be used to provide any enterprise zone facility. (b) Enterprise zone facility For purposes of this section— (1) In general

“high migration rural county” applies in that section

the term “high migration rural county” means any county which, during the 20-year period ending with the year in which the most recent census was conducted, has a net out-migration of inhabitants from the county of at least 10 percent of the population of the county at the beginning of such period. (D) Other definitions relating to subparagraph (B) For purposes of subparagraph (B)— (i) Startup period

“qualified low-income community” applies in that section

The term “qualified low-income community” means any population census tract if— (I) the poverty rate for such tract is at least 20 percent, or (II) the median family income for such tract does not exceed 80 percent of statewide median family income (or, in the case of a tract located within a metropolitan area, metropolitan area median family income if greater). Subclause (II) shall be applied using possessionwide median family income in the case of census tracts located within a possession of the United States.

“qualified zone property” applies in that section

The term “qualified zone property” has the meaning given such term by section 1397D; except that— (A) the references to empowerment zones shall be treated as including references to enterprise communities, and (B) section 1397D(a)(2) shall be applied by substituting “an amount equal to 15 percent of the adjusted basis” for “an amount equal to the adjusted basis”. (3) Enterprise zone business (A) In general Except as modified in this paragraph,

“startup period” applies in that section

The term “startup period” means, with respect to any property being provided for any business, the period before the first taxable year beginning more than 2 years after the later of— (I) the date of issuance of the issue providing such property, or (II) the date such property is first placed in service after such issuance (or, if earlier, the date which is 3 years after the date described in subclause (I)). (ii) Testing period

“testing period” applies in that section

The term “testing period” means the first 3 taxable years beginning after the startup period. (iii) Applicable nominating jurisdiction

“qualified zone employee” applies in that section

the term “qualified zone employee” means, with respect to any period, any employee of an employer if— (A) substantially all of the services performed during such period by such employee for such employer are performed within an empowerment zone in a trade or business of the employer, and (B) the principal place of abode of such employee while performing such services is within such empowerment zone.

“qualified zone wages” applies in that section

the term “qualified zone wages” means any wages paid or incurred by an employer for services performed by an employee while such employee is a qualified zone employee. (2) Only first $15,000 of wages per year taken into account With respect to each qualified zone employee, the amount of qualified zone wages which may be taken into account for a calendar year shall not exceed $15,000. (3) Coordination with work opportunity credit (A) In general The term “qualified zone wages” shall not include wages taken into account in determining the credit under section 51.

“wages” applies throughout its subpart

The term “wages” has the same meaning as when used in section 51. (2) Certain training and educational benefits (A) In general The following amounts shall be treated as wages paid to an employee: (i) Any amount paid or incurred by an employer which is excludable from the gross income of an employee under section 127, but only to the extent paid or incurred to a person not related to the employer. (ii) In the case of an employee who has not attained the age of 19, any amount paid or incurred by an employer for any youth training program operated by such employer in conjunction with local education officials.

“qualified empowerment zone asset” applies in that section

The term “qualified empowerment zone asset” means any property which would be a qualified community asset (as defined in section 1400F) 1 if in section 1400F 1 — (i) references to empowerment zones were substituted for references to renewal communities, (ii) references to enterprise zone businesses (as defined in section 1397C) were substituted for references to renewal community businesses, (iii) the date of the enactment of this paragraph were substituted for “ December 31, 2001 ” each place it appears, and (iv) the day after the date set forth in section 1391(d)(1)(A)(i) were substituted for “ January 1, 2010 ” each place it appears.

“employee” applies in that section

the term “employee” includes the proprietor. (d) Qualified business For purposes of this section— (1) In general Except as otherwise provided in this subsection,

“enterprise zone business” applies throughout its part

the term “enterprise zone business” means— (1) any qualified business entity, and (2) any qualified proprietorship. (b) Qualified business entity For purposes of this section,

“nonqualified financial property” applies in that section

the term “nonqualified financial property” means debt, stock, partnership interests, options, futures contracts, forward contracts, warrants, notional principal contracts, annuities, and other similar property specified in regulations; except that such term shall not include— (1) reasonable amounts of working capital held in cash, cash equivalents, or debt instruments with a term of 18 months or less, or (2) debt instruments described in section 1221(a)(4).

“qualified business” applies in that section

the term “qualified business” means any trade or business. (2) Rental of real property The rental to others of real property located in an empowerment zone shall be treated as a qualified business if and only if— (A) the property is not residential rental property (as defined in section 168(e)(2)), and (B) at least 50 percent of the gross rental income from the real property is from enterprise zone businesses. For purposes of subparagraph (B), the lessor of the property may rely on a lessee’s certification that such lessee is an enterprise zone business.

“qualified business entity” applies in that section

the term “qualified business entity” means, with respect to any taxable year, any corporation or partnership if for such year— (1) every trade or business of such entity is the active conduct of a qualified business within an empowerment zone, (2) at least 50 percent of the total gross income of such entity is derived from the active conduct of such business, (3) a substantial portion of the use of the tangible property of such entity (whether owned or leased) is within an empowerment zone, (4) a substantial portion of the intangible property of such entity is used in the active conduct of any such business, (5) a substantial portion of the services performed for such entity by its …

“qualified proprietorship” applies in that section

the term “qualified proprietorship” means, with respect to any taxable year, any qualified business carried on by an individual as a proprietorship if for such year— (1) at least 50 percent of the total gross income of such individual from such business is derived from the active conduct of such business in an empowerment zone, (2) a substantial portion of the use of the tangible property of such individual in such business (whether owned or leased) is within an empowerment zone, (3) a substantial portion of the intangible property of such business is used in the active conduct of such business, (4) a substantial portion of the services performed for such individual in such business by …

“qualified zone property” applies throughout its part

The term “qualified zone property” means any property to which section 168 applies (or would apply but for section 179) if— (A) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date on which the designation of the empowerment zone took effect, (B) the original use of which in an empowerment zone commences with the taxpayer, and (C) substantially all of the use of which is in an empowerment zone and is in the active conduct of a qualified business by the taxpayer in such zone.

“carryback” applies in that section

The term “carryback” means a net operating loss carryback under section 172 or a carryback of any credit provided by part IV of subchapter A. (ii) Carryback year

“carryback year” applies in that section

The term “carryback year” means the taxable year to which a carryback is carried.

“commencement date” applies in that section

the term “commencement date” means the day on which the case under title 11 of the United States Code to which this section applies commences. (e) Treatment of income, deductions, and credits (1) Estate’s share of debtor’s income The gross income of the estate for each taxable year shall include the gross income of the debtor to which the estate is entitled under title 11 of the United States Code. The preceding sentence shall not apply to any amount received or accrued by the debtor before the commencement date (as defined in subsection (d)(3)).

“applicable start date” applies in that section

the term “applicable start date” means, with respect to any qualified opportunity zone designated under this section, the January 1 following the date on which such qualified opportunity zone was certified and designated by the Secretary under subsection (b)(1)(B).

“consideration period” applies in that section

The term “consideration period” means the 30-day period beginning on the date on which the Secretary receives notice under subsection (b)(1)(A)(ii), as extended under subsection (b)(2). (B) Determination period

“decennial determination date” applies in that section

The term “decennial determination date” means— (i) July 1, 2026 , and (ii) each July 1 of the year that is 10 years after the preceding decennial determination date under this subparagraph. (3) State For purposes of this section,

“determination period” applies in that section

The term “determination period” means the 90-day period beginning on the decennial determination date, as extended under subsection (b)(2). (C) Decennial determination date

“low-income community” applies in that section

The term “low-income community” means any population census tract if— (A) such population census tract has a median family income that— (i) in the case of a population census tract not located within a metropolitan area, does not exceed 70 percent of the statewide median family income, or (ii) in the case of a population census tract located within a metropolitan area, does not exceed 70 percent of the metropolitan area median family income, or (B) such population census tract— (i) has a poverty rate of at least 20 percent, and (ii) has a median family income that— (I) in the case of a population census tract not located within a metropolitan area, does not exceed 125 percent of the …

“qualified opportunity zone” applies throughout its subchapter

the term “qualified opportunity zone” means a population census tract that is a low-income community that is designated as a qualified opportunity zone. (b) Designation (1) In general For purposes of subsection (a), a population census tract that is a low-income community is designated as a qualified opportunity zone if— (A) not later than the end of the determination period, the chief executive officer of the State in which the tract is located— (i) nominates the tract for designation as a qualified opportunity zone, and (ii) notifies the Secretary in writing of such nomination, and (B) the Secretary certifies such nomination and designates such tract as a qualified opportunity zone before …

“State” applies in that section

the term “State” includes any possession of the United States. (d) Number of designations (1) In general Except as provided by paragraph (2), the number of population census tracts in a State that may be designated as qualified opportunity zones under this section during any period may not exceed 25 percent of the number of low-income communities in the State. (2) Exception If the number of low-income communities in a State is less than 100, then a total of 25 of such tracts may be designated as qualified opportunity zones during any period.

“qualified opportunity fund” applies in that section

The term “qualified opportunity fund” means any investment vehicle which is organized as a corporation or a partnership for the purpose of investing in qualified opportunity zone property (other than another qualified opportunity fund) that holds at least 90 percent of its assets in qualified opportunity zone property, determined by the average of the percentage of qualified opportunity zone property held in the fund as measured— (A) on the last day of the first 6-month period of the taxable year of the fund, and (B) on the last day of the taxable year of the fund. (2) Qualified opportunity zone property (A) In general

“qualified opportunity zone business” applies in that section

The term “qualified opportunity zone business” means a trade or business— (i) in which substantially all of the tangible property owned or leased by the taxpayer is qualified opportunity zone business property (determined by substituting “qualified opportunity zone business” for “qualified opportunity fund” each place it appears in paragraph (2)(D)), (ii) which satisfies the requirements of paragraphs (2), (4), and (8) of section 1397C(b), and (iii) which is not described in section 144(c)(6)(B).

“qualified opportunity zone business property” applies in that section

The term “qualified opportunity zone business property” means tangible property used in a trade or business of the qualified opportunity fund if— (I) such property was acquired by the qualified opportunity fund by purchase (as defined in section 179(d)(2)) after December 31, 2017 , (II) the original use of such property in the qualified opportunity zone commences with the qualified opportunity fund or the qualified opportunity fund substantially improves the property, and (III) during substantially all of the qualified opportunity fund’s holding period for such property, substantially all of the use of such property was in a qualified opportunity zone.

“qualified opportunity zone partnership interest” applies in that section

The term “qualified opportunity zone partnership interest” means any capital or profits interest in a domestic partnership if— (i) such interest is acquired by the qualified opportunity fund after December 31, 2017 , from the partnership solely in exchange for cash, (ii) as of the time such interest was acquired, such partnership was a qualified opportunity zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being a qualified opportunity zone business), and (iii) during substantially all of the qualified opportunity fund’s holding period for such interest, such partnership qualified as a qualified opportunity zone business.

“qualified opportunity zone property” applies in that section

The term “qualified opportunity zone property” means property which is— (i) qualified opportunity zone stock, (ii) qualified opportunity zone partnership interest, or (iii) qualified opportunity zone business property. (B) Qualified opportunity zone stock (i) In general Except as provided in clause (ii),