(a) General rule. — No gain shall be recognized if shares of a corporation were sold or exchanged to a special corporation or to employees for the organization of a special corporation, subject to compliance with the following requirements:(1) The special employee-owned corporation or such employees hold immediately after such sale or exchange, at least fifty-five percent (55%) of the outstanding voting stock of said corporation.(2) The special corporation or such employees acquire within a period of time not greater than three (3) years, eighty percent (80%) of the outstanding voting stock of said corporation.(3) The proceeds from the sale or exchange are invested in similar property.(4) The period to replace or reinvest the proceeds from the sale or exchange begins three (3) months before the sale or exchange of the shares of the corporation and ends twelve (12) months after said sale or exchange takes place.(5) The taxpayer must file a written statement verified by the special corporation whereby he/she certifies that said shares have been sold or exchanged at the price paid for the same, and the percentage represented by said shares with regards to the total voting stock

corporation whereby he/she certifies that said shares have been sold or exchanged at the price paid for the same, and the percentage represented by said shares with regards to the total voting stock issued and outstanding of said corporation.(b) Definition of similar property. — For purposes of this section, the term 'similar property' shall have the same meaning as that provided in § 30144(f) of this title to the extent that it is not inconsistent with the provisions of this section.(c) Impossibility of acquiring similar property. — When the taxpayer is an individual and proves to the Secretary’s satisfaction that he/she has not been able to acquire similar property within the prescribed statutory period, the gain, if any, shall be treated as if it were a long-term capital gain, as said term is defined in § 30141(a)(4) of this title. History —Jan. 31, 2011, No. 1, § 1113.20, retroactive to Jan. 1, 2011.