payer if such property was an expanded DC Zone 
asset in the hands of a prior holder. 
‘‘(7) 5-YEAR SAFE HARBOR.—If any property 
ceases to be an expanded DC Zone asset by reason 
of paragraph (2)(A)(iii), (3)(C), or (4)(A)(iii) after 
the 5-year period beginning on the date the taxpayer 
acquired such property, such property shall continue 
to be treated as meeting the requirements of such 
paragraph; except that the amount of gain to which 
subsection (a) applies on any sale or exchange of 
such property shall not exceed the amount which 
would be qualified capital gain had such property 
been sold on the date of such cessation. 
‘‘(c) EXPANDED DC ZONE BUSINESS.—For purposes 
of this section, the term ‘expanded DC Zone business’ 
means any enterprise zone business (as defined in section 
1397C), determined— 
‘‘(1) after the application of section 1400D(d), 
‘‘(2) by substituting ‘80 percent’ for ‘50 per-
cent’ in subsections (b)(2) and (c)(1) of section 
1397C, 
‘‘(3) by treating no area other than the ex-
panded DC Zone as an empowerment zone or enter-
prise community, and 
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‘‘(4) in the case of periods beginning after De-
cember 31, 2005, without regard to subparagraph 
(B) of section 1397C(d)(2). 
‘‘(d) EXPANDED DC ZONE.—For purposes of this 
section— 
‘‘(1) IN GENERAL .—The term ‘expanded DC 
Zone’ means the DC Zone and DC Development 
Target Area. 
‘‘(2) DC ZONE.—The term ‘DC Zone’ means— 
‘‘(A) the DC Zone (within the meaning of 
section 1400, as in effect on December 31, 
2005), and 
‘‘(B) all census tracts— 
‘‘(i) which are located in the District 
of Columbia, and 
‘‘(ii) for which the poverty rate is not 
less than 10 percent as determined on the 
basis of the 1990 census. 
‘‘(3) APPLICATION
OF
SECTION
TO
EXPIRED 
PORTION OF DC ZONE.—In the case of any expanded 
DC Zone asset (determined without regard to this 
paragraph) which would not be an expanded DC 
Zone asset if the expanded DC Zone did not include 
that portion of the DC Zone which is not part the 
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DC Development Target Area, this section shall be 
applied— 
‘‘(A) by substituting ‘January 1, 2006’ for 
‘January 1, 2010’ each place it appears in sub-
section (b), 
‘‘(B) by substituting ‘January 1, 2010’ for 
‘January 1, 2014’ in subsections (e)(2) and 
(g)(2). 
‘‘(4) APPLICATION OF SECTION TO NEWLY DES-
IGNATED PORTION OF EXPANDED DC ZONE.—In the 
case of any expanded DC Zone asset (determined 
without regard to this paragraph) which would not 
be an expanded DC Zone asset if the expanded DC 
Zone did not include that portion of the DC Devel-
opment Target Area which is not part of the DC 
Zone, this section shall be applied— 
‘‘(A) by substituting ‘December 31, 2005’ 
for ‘December 31, 1997’ each place it appears 
in subsection (b), and 
‘‘(B) by substituting ‘January 1, 2006’ for 
‘January 1, 1998’ in subsections (e)(2) and 
(g)(2). 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
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‘‘(1) QUALIFIED
CAPITAL
GAIN.—Except as 
otherwise provided in this subsection, the term 
‘qualified capital gain’ means any gain recognized on 
the sale or exchange of— 
‘‘(A) a capital asset, or 
‘‘(B) property used in the trade or busi-
ness (as defined in section 1231(b). 
‘‘(2) GAIN BEFORE 1998 OR AFTER 2014 NOT 
QUALIFIED.— The term ‘qualified capital gain’ shall 
not include any gain attributable to periods before 
January 1, 1998, or after December 31, 2014. 
‘‘(3) CERTAIN
GAIN
NOT
QUALIFIED.—The 
term ‘qualified capital gain’ shall not include any 
gain which would be treated as ordinary income 
under section 1245 or under section 1250 if section 
1250 applied to all depreciation rather than the ad-
ditional depreciation. 
‘‘(4) INTANGIBLES AND LAND NOT INTEGRAL 
PART OF EXPANDED DC ZONE BUSINESS.—The term 
‘qualified capital gain’ shall not include any gain 
which is attributable to real property, or an intan-
gible asset, which is not an integral part of an ex-
panded DC Zone business. 
‘‘(5) RELATED
PARTY
TRANSACTIONS.—The 
term ‘qualified capital gain’ shall not include any 
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