‘‘(1) IN GENERAL.—The amount of gain on any 
qualified telecommunications sale which is not recog-
nized by reason of this section— 
‘‘(A) shall not exceed $250,000,000 per 
sale, and 
‘‘(B) shall not exceed 1⁄3 of such dollar 
amount per taxable year. 
‘‘(2) 
CARRYFORWARDS
OF
UNUSED 
AMOUNTS.—If the amount of gain on any qualified 
telecommunications sale which is not recognized by 
reason of this section exceeds the limitation imposed 
by paragraph (1)(B) for the taxable year, such ex-
cess shall be carried to the succeeding taxable year 
and added to the amount allowable under this sec-
tion for such taxable year. 
‘‘(c) QUALIFIED TELECOMMUNICATIONS SALE.—For 
purposes of this section, the term ‘qualified telecommuni-
cations sale’ means any sale to an eligible purchaser of— 
‘‘(1) the assets of a telecommunications busi-
ness, or 
‘‘(2) stock in a corporation if, immediately after 
such sale— 
‘‘(A) the eligible purchaser controls (within 
the meaning of section 368(c)) such corpora-
tion, and
‘‘(B) substantially all of the assets of such 
corporation are assets of 1 or more tele-
communications businesses, or 
‘‘(3) an interest in a partnership if, immediately 
after such sale— 
‘‘(A) the eligible purchaser owns a partner-
ship interest possessing— 
‘‘(i) at least 80 percent of the total 
combined voting power of all classes of 
partnership interests entitled to vote, 
‘‘(ii) control over the management of 
the partnership, 
‘‘(iii) at least 80 percent of the capital 
interests of the partnership, and 
‘‘(iv) a distributive share of at least 
80 percent of each item of the partner-
ship’s income, gain, loss, deduction or 
credit, and 
‘‘(B) substantially all of the assets of such 
partnership are assets of 1 or more tele-
communications businesses. 
‘‘(d) SPECIAL RULES.— 
‘‘(1) IN GENERAL.—In applying section 1033 
for purposes of subsection (a), stock of a corporation 
or an interest in a partnership operating a tele-
communications business, whether or not rep-
resenting control of such corporation or partnership, 
shall be treated as property similar or related in 
service or use to the property sold in the qualified 
telecommunications sale. 
‘‘(2) ELECTION
TO
REDUCE
BASIS
RATHER 
THAN RECOGNIZE REMAINDER OF GAIN.—If— 
‘‘(A) a taxpayer elects the treatment under 
subsection (a) with respect to any qualified tele-
communications sale, and 
‘‘(B) an amount of gain would (but for 
this paragraph) be recognized on such sale 
under section 1033(a)(2)(A) in excess of the 
amount required to be recognized by reason of 
subsection (b), 
then the amount of gain described in this subpara-
graph shall not be recognized to the extent that the 
taxpayer elects to reduce the basis of depreciable 
property (within the meaning of section 1017(b)(3)) 
held by the taxpayer immediately after the sale or 
acquired in the same taxable year. The manner and 
amount of such reduction shall be determined under 
regulations prescribed by the Secretary.
‘‘(3) BASIS.—For basis of property acquired on 
a sale or exchange treated as an involuntary conver-
sion under subsection (a), see section 1033(b). 
‘‘(e) RECAPTURE
OF
TAX
BENEFIT
IF
TELE-
COMMUNICATIONS BUSINESS RESOLD WITHIN 3 YEARS, 
ETC.— 
‘‘(1) IN GENERAL.—If, within 3 years after the 
date of any qualified telecommunications sale, there 
is a recapture event with respect to the property in-
volved in such sale, then the purchaser’s tax imposed 
by this chapter for the taxable year in which such 
event occurs shall be increased by an amount equal 
to the product of— 
‘‘(A) the highest marginal rate of income 
tax imposed on corporations under section 11, 
and 
‘‘(B) the lesser of— 
‘‘(i) the consideration furnished by the 
purchaser in such sale, or 
‘‘(ii) the dollar amount specified in 
subsection (b)(1)(A). 
‘‘(2) EXCEPTION FOR REINVESTED AMOUNTS.— 
Paragraph (1) shall not apply to any recapture event 
which is a sale if—
‘‘(A) the sale is a qualified telecommuni-
cations sale, or 
‘‘(B) during the 60-day period beginning 
on the date of such sale, the taxpayer is the 
purchaser in another qualified telecommuni-
cations sale in which the consideration fur-
nished by the taxpayer is not less than the 
amount realized on the recapture event sale. 
‘‘(3) RECAPTURE EVENT.—For purposes of this 
subsection, the term ‘recapture event’ means, with 
respect to any qualified telecommunications sale— 
‘‘(A) any sale or other disposition of the 
assets, stock, or partnership interest referred to 
in subsection (c) which were acquired by the 
taxpayer in such sale, and 
‘‘(B) in the case of a qualified tele-
communications sale described in paragraph (2) 
or (3) of subsection (c)— 
‘‘(i) any sale or other disposition of a 
telecommunications business by the cor-
poration or partnership referred to in such 
subsection, or 
‘‘(ii) any other transaction which re-
sults in the eligible purchaser ceasing to be 
an eligible purchaser, or ceasing to have
control (as defined in subsection (c)(2)(A)) 
of such corporation or ownership of an in-
terest in such partnership sufficient to sat-
isfy 
the 
requirements 
of 
subsection 
(c)(3)(A). 
‘‘(f) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ELIGIBLE PURCHASER.—The term ‘eligible 
purchaser’ means— 
‘‘(A) any economically and socially dis-
advantaged business, or 
‘‘(B) any corporation or partnership if im-
mediately following the purchase— 
‘‘(i) substantially all the assets of 
such corporation or partnership are assets 
of 1 or more telecommunications busi-
nesses, and 
‘‘(ii) the Telecommunications Develop-
ment Fund established under section 714 
of the Communications Act of 1934 (47 
U.S.C. 614) or any wholly-owned affiliate 
of such Fund owns at least 5 percent of— 
‘‘(I) the stock in such corpora-
tion,
‘‘(II) the partnership interest in 
such partnership, or 
‘‘(III) the indebtedness convert-
ible into such stock or partnership in-
terest. 
‘‘(2) ECONOMICALLY AND SOCIALLY DISADVAN-
TAGED BUSINESS.—The term ‘economically and so-
cially disadvantaged business’ means a person which 
is designated by the Secretary as an economically 
and socially disadvantaged business based on a de-
termination that such person— 
‘‘(A) meets the control requirements of 
paragraph (6), 
‘‘(B) will be a telecommunications business 
after the purchase for which the eligibility de-
termination is sought, and 
‘‘(C) before the purchase for which the eli-
gibility determination is sought does not have— 
‘‘(i) attributable ownership interest in 
television broadcast stations having an ag-
gregate national audience reach of more 
than 5 percent as defined by the Federal 
Communications Commission under section 
73.3555(e)(2)(i) of title 47 of the Code of
Federal Regulations as in effect on Janu-
ary 1, 2001, 
‘‘(ii) attributable ownership interest 
in— 
‘‘(I) more than 50 radio stations 
nationally, and 
‘‘(II) radio stations with a com-
bined market share exceeding 10 per-
cent of radio advertising revenues in 
the relevant market as defined by the 
Federal Communications Commission, 
or 
‘‘(iii) attributable ownership interest 
in any other telecommunications business 
having more than 5 percent of national 
subscribers of their respective service. 
‘‘(3) RELEVANT MARKET.—The term ‘relevant 
market’ means the local radio market served by the 
radio station or stations being purchased. 
‘‘(4) TELECOMMUNICATIONS
BUSINESS.—The 
term ‘telecommunications business’ means a busi-
ness which, as its primary purpose, engages in elec-
tronic communications and is regulated by the Fed-
eral Communications Commission pursuant to the 
Communications Act of 1934, including a cable sys-
tem (as defined in section 602(7) of such Act (47 
U.S.C. 522(7))), a radio station (as defined in sec-
tion 3(35) of such Act (47 U.S.C. 153(35))), a 
broadcasting station providing television service (as 
defined in section 3(49) of such Act (47 U.S.C. 
153(49))), a provider of direct broadcast satellite 
service (as defined in section 335(b)(5)(A) of such 
Act (47 U.S.C. 335(b)(5)(A))), a provider of video 
programming (as defined in section 602(20) of such 
Act (47 U.S.C. 522(20))), a provider of commercial 
mobile services (as defined in section 332(d)(1) of 
such Act (47 U.S.C. 332(d)(1))), a telecommuni-
cations carrier (as defined in section 3(44) of such 
Act (47 U.S.C. 153(44))), a provider of fixed sat-
ellite service, a reseller of the communications serv-
ice or commercial mobile service, or a provider of 
multichannel multipoint distribution service. 
‘‘(5) PURCHASE.—A taxpayer shall be consid-
ered to have purchased a property if, but for sub-
section (d)(2) and the application of section 1033(b), 
the basis of the property would be its cost within the 
meaning of section 1012. 
‘‘(6) CONTROL.— 
‘‘(A) INDIVIDUALS.—For purposes of para-
graph (2)(A), an individual who meets the re-
quirements of paragraph (7) also meets the re-
quirements of this paragraph. 
‘‘(B) ENTITIES.—For purposes of para-
graph (2)(A), an entity meets the requirement 
of this paragraph if the requirements of sub-
paragraphs (C), (D), or (E) are satisfied. 
‘‘(C) 30-PERCENT
TEST.—The require-
ments of this subparagraph are satisfied if— 
‘‘(i) with respect to any entity which 
is a corporation, individuals who meet the 
requirements of paragraph (7) collectively 
own at least 30 percent in value of the out-
standing stock of the corporation, and 
more than 50 percent of the total com-
bined voting power of all classes of stock 
entitled to vote of the corporation, and 
‘‘(ii) with respect to any entity which 
is a partnership, individuals who meet the 
requirements of paragraph (7) collectively 
own at least 30 percent of the capital in-
terests in the partnership, a distributive 
share of at least 30 percent of each item 
of the partnership’s income, gain, loss, de-
duction, or credit, more than 50 percent of 
the total combined voting power of all