§1071. Gain from sale or exchange to effectuate policies of F.C.C.

(a) Nonrecognition of gain or loss

If the sale or exchange of property (including stock in a corporation) is certified by the Federal Communications Commission to be necessary or appropriate to effectuate a change in a policy of, or the adoption of a new policy by, the Commission with respect to the ownership and control of radio broadcasting stations, such sale or exchange shall, if the taxpayer so elects, be treated as an involuntary conversion of such property within the meaning of section 1033. For purposes of such section as made applicable by the provisions of this section, stock of a corporation operating a radio broadcasting station, whether or not representing control of such corporation, shall be treated as property similar or related in service or use to the property so converted. The part of the gain, if any, on such sale or exchange to which section 1033 is not applied shall nevertheless not be recognized, if the taxpayer so elects, to the extent that it is applied to reduce the basis for determining gain or loss on sale or exchange of property, of a character subject to the allowance for depreciation under section 167, remaining in the hands of the taxpayer immediately after the sale or exchange, or acquired in the same taxable year. The manner and amount of such reduction shall be determined under regulations prescribed by the Secretary. Any election made by the taxpayer under this section shall be made by a statement to that effect in his return for the taxable year in which the sale or exchange takes place, and such election shall be binding for the taxable year and all subsequent taxable years.

(b) Basis

For basis of property acquired on a sale or exchange treated as an involuntary conversion under subsection (a), see section 1033(b).

(Aug. 16, 1954, ch. 736, 68A Stat. 311 ; Sept. 2, 1958, Pub. L. 85–866, title I, §48(a), 72 Stat. 1642 ; Oct. 4, 1976, Pub. L. 94–455, title XIX, §§1901(b)(31)(E), 1906(b)(13)(A), 90 Stat. 1800 , 1834.)

Amendments

1976-Subsec. (a). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsec. (b). Pub. L. 94–455, §1901(b)(31)(E), substituted "section 1033(b)" for "section 1033(c)".

1958-Subsec. (a). Pub. L. 85–866 substituted "to effectuate a change in a policy of, or the adoption of a new policy by, the Commission" for "to effectuate the policies of the Commission".

Effective Date of 1976 Amendment

Amendment by section 1901(b)(31)(E) of Pub. L. 94–455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Effective Date of 1958 Amendment

Section 48(b) of Pub. L. 85–866 provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to any sale or exchange after December 31, 1957".

Section Referred to in Other Sections

This section is referred to in sections 1245, 1250 of this title.