118 STAT. 1457 PUBLIC LAW 108–357—OCT. 22, 2004 if any replacement qualifying vessel is acquired during the period specified in subsection (b), except to the extent that the amount realized upon such sale or disposition exceeds the cost of the replace ment qualifying vessel. ‘‘(b) PERIOD WITHIN WHICH PROPERTY MUST BE REPLACED.— The period referred to in subsection (a) shall be the period beginning one year prior to the disposition of the qualifying vessel and ending— ‘‘(1) 3 years after the close of the first taxable year in which the gain is realized, or ‘‘(2) subject to such terms and conditions as may be speci fied by the Secretary, on such later date as the Secretary may designate on application by the taxpayer. Such application shall be made at such time and in such manner as the Secretary may by regulations prescribe. ‘‘(c) APPLICATION OF SECTION TO NONCORPORATE OPERATORS.— For purposes of this section, the term ‘qualifying vessel operator’ includes any person who would be a qualifying vessel operator were such person a corporation. ‘‘(d) TIME FOR ASSESSMENT OF DEFICIENCY ATTRIBUTABLE TO GAIN.—If a qualifying vessel operator has made the election pro vided in subsection (a), then— ‘‘(1) the statutory period for the assessment of any defi ciency, for any taxable year in which any part of the gain is realized, attributable to such gain shall not expire prior to the expiration of 3 years from the date the Secretary is notified by such operator (in such manner as the Secretary may by regulations prescribe) of the replacement qualifying vessel or of an intention not to replace, and ‘‘(2) such deficiency may be assessed before the expiration of such 3 year period notwithstanding the provisions of section 6212(c) or the provisions of any other law or rule of law which would otherwise prevent such assessment. ‘‘(e) BASIS OF REPLACEMENT QUALIFYING VESSEL.—In the case of any replacement qualifying vessel purchased by the qualifying vessel operator which resulted in the nonrecognition of any part of the gain realized as the result of a sale or other disposition of a qualifying vessel, the basis shall be the cost of the replacement qualifying vessel decreased in the amount of the gain not so recog nized; and if the property purchased consists of more than one piece of property, the basis determined under this sentence shall be allocated to the purchased properties in proportion to their respective costs.’’. (b) TECHNICAL AMENDMENTS.— (1) The second sentence of section 56(g)(4)(B)(i), as amended by this Act, is further amended by inserting ‘‘or 1357’’ after ‘‘section 139A’’. (2) The table of subchapters for chapter 1 is amended by inserting after the item relating to subchapter S the fol lowing new item: ‘‘Subchapter R. Election to determine corporate tax on certain international shipping activities using per ton rate.’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after the date of the enact ment of this Act. 26 USC 56 note.
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