Exclusion of Gain From Sale of DC Zone Assets(p21)

If you sold or exchanged a District of Columbia Enterprise Zone (DC Zone) asset acquired after 1997 and before 2012, held for more than 5 years, you may be able to exclude the qualified capital gain.

A DC Zone asset is any of the following.

• DC Zone business stock.
• DC Zone partnership interest.
• DC Zone business property.

The qualified capital gain is any gain recognized on the sale or exchange of a DC Zone asset that is a capital asset or property used in a trade or business. It does not include any of the following gains.

• Gain treated as ordinary income under section 1245.
• Gain treated as unrecaptured section 1250 gain. The section 1250 gain must be figured as if it applied to all depreciation rather than the additional depreciation.
• Gain attributable to real property, or an intangible asset, which is not an integral part of a DC Zone business.
• Gain from a related-party transaction. See Sales and Exchanges Between Related Persons in chapter 2.

See section 1400B of the Internal Revenue Code for more details on DC Zone assets and special rules.