SECTION 4. COMMERCIAL

REVITALIZATION DEDUCTION ELECTION FOR A QUALIFIED REVITALIZATION BUILDING IN THE EXPANDED AREA

.01 Return already filed for the placed- in-service year of a qualified revitalization building in the expanded area .

(1) In general . If a taxpayer receives a retroactive commercial revitalization expenditure allocation made in accordance with section 3 of this revenue procedure for a qualified revitalization building that was placed in service by the taxpayer in the expanded area of a renewal community and the taxpayer filed the federal tax return for the placed-in-service year of that building on or before the date the taxpayer received the retroactive commercial revitalization expenditure allocation, the taxpayer must make the commercial revi

talization deduction election provided by § 1400I(a) for the building within the time and in the manner described in section 4.01(2) of this revenue procedure. The election is made by each person owning the qualified revitalization building (for example, by the member of a consolidated group, the partnership, or the S corporation that owns the building). The election only applies to the extent that a retroactive commercial revitalization expenditure allocation was timely made to the building by the commercial revitalization agency of the state in which the building is located. If the amount of that allocation exceeds the amount properly chargeable to a capital account for the building, the qualified revitalization expenditures eligible for the commercial revitalization deduction election are limited to the amount properly chargeable to a capital account for the building.

(2) Time and manner for making the election . A taxpayer described in section 4.01(1) of this revenue procedure may make the commercial revitalization deduction election for the qualified revitalization building in the renewal community’s expanded area either by:

(a) filing an amended federal tax return(s) (or a qualified amended return(s) under Rev. Proc. 94–69, 1994–2 C.B. 804, if applicable) for the placed-in-service year and all subsequent affected taxable year(s), provided that the placed-inservice year and all subsequent taxable year(s) are open under the period of limitations for assessment under § 6501(a). The amended federal tax return(s) (or qualified amended return(s)) must include the adjustment to taxable income for the commercial revitalization deduction election and any collateral adjustments to taxable income or to the tax liability (for example, the amount of depreciation claimed in that taxable year under § 168 for the qualified revitalization building to which the election pertains). The amended federal tax return(s) (or qualified amended return(s)) should include the statement “Filed Pursuant to Rev. Proc. 2006–16” at the top of the amended return(s) (or qualified amended return(s)). In accordance with § 1.446–1(e)(3)(ii), section 2.04 of Rev. Proc. 2002–9, 2002–1 C.B. 327 (as modified and clarified by Announcement 2002–17, 2002–1 C.B. 561, modified and amplified by Rev. Proc. 2002–19, 2002–1 C.B. 696, amplified, clarified, and modi

2006–9 I.R.B. 543 February 27, 2006

more than 5 years is excluded from gross income pursuant to § 1400F.