SECTION 6. CARRYOVER

ALLOCATIONS

.01 In general . (1) Definition of a carryover alloca- tion . A carryover allocation is an allocation that is made with respect to a qualified revitalization building that is placed in service by a taxpayer not later than the close of the second calendar year following the calendar year in which the allocation is made, provided the taxpayer’s basis in the project of which the building is a part (as of the later of the date that is 6 months after the date that the allocation is made or the close of the calendar year in which the allocation is made) is more than 10 percent of the taxpayer’s reasonably expected basis in the project as of the close of the second calendar year following the calendar year in which the allocation is made. A carryover allocation may be for either a single-building project (a building-based allocation) or a multi-building project (a project-based allocation). A carryover allocation reduces the commercial revitalization expenditure ceiling for the calendar year in which the allocation is made. If a carryover allocation is made after June 30, 2002, and before January 1, 2003, see section 8.03 of this revenue procedure for the special rule for the 10 percent basis requirement.

(2) Determination of reasonably ex- pected basis . The taxpayer’s reasonably expected basis in a project is the taxpayer’s reasonably expected adjusted basis in land and depreciable property, as determined under §§ 1012 and 1016, that is reasonably expected to be part of the project, whether or not these amounts are includible in the basis of the qualified revitalization building.