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to obtain section 1042(a) nonrecognition treatment with
respect to the sale of qualified securities, it may not
subsequently make an election on an amended return or
otherwise. Also, an election once made is irrevocable.
(b) The statement of election shall provide that the
taxpayer elects to treat the sale of securities as a sale of
qualified securities under section 1042(a), and shall
contain the following information:
(1) A description of the qualified securities
sold, including the type and number of shares;
(2) The date of the sale of the qualified
securities;
(3) The adjusted basis of the qualified
securities;
(4) The amount realized upon the sale of the
qualified securities;
(5) The identity of the employee stock ownership
plan or eligible worker-owned cooperative to which the
qualified securities were sold; and
(6) If the sale was part of a single, interrelated
transaction under a prearranged agreement between
taxpayers involving other sales of qualified
securities, the names and taxpayer identification
numbers of the other taxpayers under the agreement and
the number of shares sold by the other taxpayers. See
Q&A-2 of this section.
If the taxpayer has purchased qualified replacement property
at the time of the election, the taxpayer must attach as
part of the statement of election a “statement of purchase”
describing the qualified replacement property, the date of
the purchase, and the cost of the property, and declaring
such property to be the qualified replacement property with
respect to the sale of qualified securities. Such statement
of purchase must be notarized by the later of thirty days
after the purchase or March 6, 1986. In addition, the
statement of election must be accompanied by the verified
written statement of consent required under Q&A-2 of this
section with respect to the qualified securities sold.
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Last modified: May 25, 2011