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131 STAT. 2185 PUBLIC LAW 115–97—DEC. 22, 2017 ‘‘(1) YEAR OF INCLUSION.—Gain to which subsection (a)(1)(B) applies shall be included in income in the taxable year which includes the earlier of— ‘‘(A) the date on which such investment is sold or exchanged, or ‘‘(B) December 31, 2026. ‘‘(2) AMOUNT INCLUDIBLE.— ‘‘(A) IN GENERAL.—The amount of gain included in gross income under subsection (a)(1)(A) shall be the excess of— ‘‘(i) the lesser of the amount of gain excluded under paragraph (1) or the fair market value of the invest- ment as determined as of the date described in para- graph (1), over ‘‘(ii) the taxpayer’s basis in the investment. ‘‘(B) DETERMINATION OF BASIS.— ‘‘(i) IN GENERAL.—Except as otherwise provided in this clause or subsection (c), the taxpayer’s basis in the investment shall be zero. ‘‘(ii) INCREASE FOR GAIN RECOGNIZED UNDER SUB- SECTION (a)(1)(B).—The basis in the investment shall be increased by the amount of gain recognized by rea- son of subsection (a)(1)(B) with respect to such prop- erty. ‘‘(iii) INVESTMENTS HELD FOR 5 YEARS.—In the case of any investment held for at least 5 years, the basis of such investment shall be increased by an amount equal to 10 percent of the amount of gain deferred by reason of subsection (a)(1)(A). ‘‘(iv) INVESTMENTS HELD FOR 7 YEARS.—In the case of any investment held by the taxpayer for at least 7 years, in addition to any adjustment made under clause (iii), the basis of such property shall be increased by an amount equal to 5 percent of the amount of gain deferred by reason of subsection (a)(1)(A). ‘‘(c) SPECIAL RULE FOR INVESTMENTS HELD FOR AT LEAST 10 YEARS.—In the case of any investment held by the taxpayer for at least 10 years and with respect to which the taxpayer makes an election under this clause, the basis of such property shall be equal to the fair market value of such investment on the date that the investment is sold or exchanged. ‘‘(d) QUALIFIED OPPORTUNITY FUND.—For purposes of this sec- tion— ‘‘(1) IN GENERAL.—The term ‘qualified opportunity fund’ means any investment vehicle which is organized as a corpora- tion or a partnership for the purpose of investing in qualified opportunity zone property (other than another qualified oppor- tunity fund) that holds at least 90 percent of its assets in qualified opportunity zone property, determined by the average of the percentage of qualified opportunity zone property held in the fund as measured— ‘‘(A) on the last day of the first 6-month period of the taxable year of the fund, and ‘‘(B) on the last day of the taxable year of the fund. ‘‘(2) QUALIFIED OPPORTUNITY ZONE PROPERTY.— ‘‘(A) IN GENERAL.—The term ‘qualified opportunity zone property’ means property which is— VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00133 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS