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(c) If the taxpayer has not purchased qualified
replacement property at the time of the filing of the
statement of election, a timely election under this Q&A
shall not be considered to have been made unless the
taxpayer attaches the notarized statement of purchase
described above to the taxpayer’s income tax return filed
for the taxable year following the year for which the
election under section 1042(a) was made. Such notarized
statement of purchase shall be filed with the district
director or the director of the regional service center with
whom such election was originally filed, if the return is
not filed with such director.
Sec. 1.1042-1T, A-2, Q&A-3, 51 Fed. Reg. 4334 (Feb. 4, 1986).
Having not literally complied with the election requirements
in the statute and the regulation, petitioner argues that he
substantially complied with the requirements of section 1042 and
should, therefore, receive the benefits of the section because
the failure to file the elections was “purely administrative in
nature”. We disagree.
Section 1042 requires that an election, in the form
prescribed by the Secretary, be made by the due date (including
extensions) for filing the return for the year of the sale.3
3 We note that, in certain circumstances, the Commissioner
may grant an extension of time to make an election. If the
taxpayer has not filed a request for an extension, an automatic
extension of 6 months from the due date of the original tax
return may be granted if the taxpayer has taken corrective action
within the 6-month extension period. Sec. 301.9100-2T(b),
Temporary Proced. & Admin. Regs., 61 Fed. Reg. 33368 (June 27,
1996). As relevant here, “corrective action” is defined as
“filing an original or an amended return for the year the
regulatory or statutory election should have been made and
attaching the appropriate form or statement for making the
election.” Sec. 301.9100-2T(c), Temporary Proced. & Admin.
Regs., 61 Fed. Reg. 33368 (June 27, 1996). Petitioner timely
(continued...)
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