We Like Historic Train Stations; Where is MapQuest In Downtown Denver; How Does The Enterprise Zone Businesses and IRC Section 1202 Qualified Small Business Stock Work Under H.R. 4923.
1. The Bush campaign begins in Pittsburgh, Penn.Presidential Candidate George W. Bush and his crew are off and running. Where is 1100 Liberty, Pittsburgh, 15222, home of the Amtrak Station? If you go to EZ Locator you will find that it is right next door to the Pittsburgh Enterprise Community which is part of his program to emphasize those areas left behind.
Is it possible that Pittsburgh could benefit from the pending Distressed Communities Legislation? It will depend on the provisions and their effective dates. As adopted H.R. 4923's effective dates are not to attractive, but S. 2936, the Senate version may change that. More importantly is the other items contained in S. 2936, such as S. 664, "The Historic Homeownership Act," which could be the big sleeper, if it is applicable for all rehab after enactment.
2. MapQuest sells out to AOL, who cares?MapQuest went public in early 1999, and raised over $50M. Before that it was a closely held company which qualified for IRC Section 1202 status as to all common stock issued after August 1993. Recently it merged with AOL. If you can work through all the legalese you will see that someone has significant IRC Section 1202 Qualified Small Business Stock, which will then transfer to the AOL stock received in the merger under IRC Section 1045, which then will be part of AOL/Times Warner.
In short, as has been the case with many other Dot-Com mergers, significant amounts of IRC Section 1202 Qualified Small Business Stock is now available for sale and reinvestment under IRC Section 1045.
The company itself is located in several places including mid town Manhattan. However, one of their key locations is 1730 Blake Street Denver, CO 80202 which is near the Denver Enterprise Community. Wait till the tax advisors start to figure this all out.
3. How will the Distressed Community Rules under proposed IRC Section 1397B work with IRC Sections 1202 and 1045?
All of this may be speculative to some, but may be real to others. However, if the goal is to create capital in distressed neighborhoods, just like other incentives for socially acceptable goals such as oil and gas development, alternative energy, etc., is to be encouraged, then some of the rules could be interpreted to encourage rather than discourage participation.
Is it possible to go from a non Enterprise Zone Business that qualifies for IRC Section 1202 Qualified Small Business Stock treatment, and then sell and reinvest in similar stock in an Enterprise Zone Business, which qualifies under IRC Section 1202, which is then sold and reinvested into another Enterprise Zone Business under IRC Section1397B? This is going to create a whole new world for the creative ones, with the upside being more capital for Enterprise Zone Businesses.
Jim Schneider, LL.M.
The Taxman86 Speaks... is copyright 1998-2010 by James E. Schneider, LL.M. Inc.