SECTION 6. EFFECTIVE DATE

This revenue procedure is effective for NOLs arising in taxable years ending after December 31, 2007.

to the taxpayer’s timely filed federal income tax return for the taxable year in which the applicable 2008 NOL arises. The statement must state that the taxpayer is electing to apply § 172(b)(1)(H) and specify the length of the NOL carryback period elected by the taxpayer (3, 4, or 5 years). If the taxpayer’s taxable year of the applicable 2008 NOL ends before February 17, 2009, the taxpayer must make the election on or before the later of the due date (including extensions of time) of the taxpayer’s return for that taxable year or April 17, 2009.

(3) Electing on an appropriate form . A taxpayer that did not make the election under § 172(b)(1)(H) using the procedures of section 4.01(2) of this revenue procedure, and did not elect to forgo the NOL carryback period under § 172(b)(3), may make the election under § 172(b)(1)(H) as follows:

(a) What to file . (i) A taxpayer may make the election under § 172(b)(1)(H) by filing the appropriate form applying the NOL carryback period chosen by the taxpayer. No statement or label is required with the appropriate form. The appropriate form is:

(A) For corporations: Form 1139, Cor- poration Application for Tentative Refund, or Form 1120X, Amended U.S. Corpora- tion Income Tax Return .

(B) For individuals: Form 1045, Ap- plication for Tentative Refund, or Form 1040X, Amended U.S. Individual Income Tax Return .

(C) For estates or trusts: Form 1045, or amended Form 1041, U.S. Income Tax Return for Estates and Trusts .

(ii) A taxpayer that makes the election under § 172(b)(1)(H) by filing an amended return must file the return for the earliest taxable year to which the taxpayer is carrying back the applicable 2008 NOL. The taxpayer should not file an amended return for the applicable 2008 NOL taxable year.

(b) When to file . The appropriate form must be filed on or before the later of the date that is 6 months after the due date (excluding extensions) for filing the taxpayer’s return for the taxable year of the applicable 2008 NOL or April 17, 2009.

(c) Additional rules . If a taxpayer makes the election by filing an appropriate form that amends a prior refund claim, the amendment also will apply to a carryback

of any alternative tax NOL for the same taxable year. In the case of an amended application for a tentative carryback adjustment, the 90-day period described in § 6411(b) will begin on the date the amended application is filed.

.02 Revocation of the election to waive NOL carryback period . A taxpayer within the scope of this revenue procedure that previously elected under § 172(b)(3) to forgo the carryback period for an applicable 2008 NOL for a taxable year ending before February 17, 2009, may revoke that election and make the election under § 172(b)(1)(H). Any revocation of the election to forgo the NOL carryback period also will apply to a carryback of any alternative tax NOL for the same taxable year. The taxpayer makes the revocation and election by following the procedures of section 4.01(3) of this revenue procedure. In addition, the taxpayer should type or print across the top of the appropriate form “Revocation of NOL Carryback Waiver Pursuant to Rev. Proc. 2009–19.” The taxpayer must file the revocation and new election under § 172(b)(1)(H) on or before April 17, 2009.

.03 Partnerships, S corporations, and sole proprietorships .

(1) If the taxpayer is a partner in a partnership that qualifies as an ESB, the taxpayer may make the § 172(b)(1)(H) election for its distributive share of the qualifying ESB partnership income, gain, loss, and deduction that is both allocable to the taxpayer under § 704 and allowed in calculating the taxpayer’s applicable 2008 NOL.

(2) If the taxpayer is a shareholder in an S corporation that qualifies as an ESB, the taxpayer may make the § 172(b)(1)(H) election for its pro rata share of the qualifying ESB S corporation income, gain, loss, and deduction under § 1366 that is allowed in calculating the shareholder’s applicable 2008 NOL.

(3) If the taxpayer is an owner of a sole proprietorship that qualifies as an ESB, the taxpayer may make the § 172(b)(1)(H) election for the qualifying ESB sole proprietorship income, gain, loss, and deduction that is allowed in calculating the taxpayer’s applicable 2008 NOL.

(4) In determining whether a partnership, S corporation, or sole proprietorship qualifies as an ESB, the gross receipts test

May 11, 2009 937 2009–19 I.R.B.

means the greater of (A) the area median gross income for the area in which the residence is located, or (B) the statewide median gross income for the state in which the residence is located.

.05 Section 143(f)(5) provides for an upward adjustment of the income limitations in certain high housing cost areas. Under § 143(f)(5)(C), a high housing cost area is a statistical area for which the housing cost/income ratio is greater than 1.2. The housing cost/income ratio is determined under § 143(f)(5)(D) by dividing (a) the applicable housing price ratio by (b) the ratio that the area median gross income bears to the median gross income for the United States. The applicable housing price ratio is the new housing price ratio (new housing average purchase price for the area divided by the new housing average purchase price for the United States) or the existing housing price ratio (existing housing average area purchase price divided by the existing housing average purchase price for the United States), whichever results in the housing cost/income ratio being closer to 1. This income adjustment applies only to bonds issued, and nonissued bond amounts elected, after December 31, 1988. See § 4005(h) of the Technical and Miscellaneous Revenue Act of 1988, 1988–3 C.B. 1, 311 (1988).

.06 The Department of Housing and Urban Development (HUD) has computed the median gross income for the United States, the states, and statistical areas within the states. The income information was released to the HUD regional offices on March 19, 2009, and may be obtained by calling the HUD reference service at 1–800–245–2691. The income information is also available at HUD’s World Wide Web site, http:huduser.org/datasets/il.html, which provides a menu from which you may select the year and type of data of interest. The Internal Revenue Service annually publishes the median gross income for the United States.

.07 The most recent nationwide average purchase prices and average area purchase price safe harbor limitations were published on March 16, 2009, in Rev. Proc. 2009–18, 2009–11 I.R.B. 670.