SECTION 3. PASSTHROUGH

ENTITIES

.01 A passthrough entity (within the meaning of § 1202(g)(4)) may make a § 1397B election if the entity sells a QEZ asset purchased after December 21, 2000, and held for more than one year, purchases a replacement QEZ asset in the same zone as the sold QEZ asset within 60 days of the sale of QEZ asset, and otherwise satisfies the requirements of § 1397B and this revenue procedure.

.02 If the passthrough entity chooses not to make the § 1397B election, a taxpayer who held an interest in the entity at the time the entity sold the QEZ asset, purchases a replacement QEZ asset in the same zone as the sold QEZ asset within 60 days of the sale of the QEZ asset, and otherwise sat

2002–40 I.R.B. 682 October 7, 2002

spect to the gain. This amended return must be filed on or before January 6, 2003, and must include the statement “Filed Pursuant to Rev. Proc. 2002–62” at the top of the amended return.

.03 Scope of the Election. If a taxpayer has more than one sale of a QEZ asset in a taxable year that qualifies for the § 1397B election, the taxpayer may make a § 1397B election for one or more of those sales.

.04 Revocation . A § 1397B election is revocable only with the prior written consent of the Commissioner of Internal Revenue. To request the Commissioner’s consent, the taxpayer who made the § 1397B election must submit a request for a private letter ruling in accordance with the provisions of Rev. Proc. 2002–1, 2002–1 I.R.B. 1 (or its successors).

DRAFTING INFORMATION

The principal author of this revenue procedure is Douglas Kim of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Mr. Kim at (202) 622–3110 (not a tollfree call).