Page:United States Statutes at Large Volume 100 Part 3.djvu/540

 100 STAT. 2348

PUBLIC LAW 99-514—OCT. 22, 1986

(c) CLERICAL AMENDMENT.—The table of sections for subpart A of part II of subchapter E of chapter 1 is amended by adding at the end thereof the following new item: "Sec. 448. Limitation on use of cash method of accounting." (d) EFFECTIVE DATE.—

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 1986. (2) ELECTION TO RETAIN CASH METHOD FOR CERTAIN TRANS-

ACTIONS.—A taxpayer may elect not to have the amendments made by this section apply to any loan or lease, or any transaction with a related party (within the meaning of section 267(b) of the Internal Revenue Code of 1954, as in effect before the enactment of this Act), entered into on or before September 25, 1985. Any election under the preceding sentence may be made separately with respect to each transaction. (3) CERTAIN CONTRACTS.—The amendments made by this section shall not apply to— (A) contracts for the acquisition or transfer of real property, and (B) contracts for services related to the acquisition or development of real property, but only if such contracts were entered into before September 25, 1985, and the sole element of the contract which has not been performed as of September 25, 1985, is payment for such property or services. (4) TREATMENT OF AFFILIATED GROUP PROVIDING ENGINEERING

SERVICES.—Each member of an affiliated group of corporations (within the meaning of section 1504(a) of the Internal Revenue Code of 1986) shall be allowed to use the cash receipts and disbursements method of accounting for any trade or business of providing engineering services with respect to taxable years ending after December 31, 1986, if the common parent of such group— (A) was incorporated in the State of Delaware in 1970, (B) was the successor to a corporation that was incorporated in the State of Illinois in 1949, and (C) used the completed contract method of accounting for a substantial part of its income from the performance of engineering services. SEC. 802. SIMPLIFIED DOLLAR-VALUE LIFO METHOD FOR CERTAIN SMALL BUSINESSES.

(a) GENERAL RULE.—Section 474 (relating to election by certain small businesses to use one inventory pool) is amended to read as follows: "SEC. 474. SIMPLIFIED DOLLAR-VALUE LIFO METHOD FOR CERTAIN SMALL BUSINESSES.

"(a) GENERAL RULE.—An eligible small business may elect to use the simplified dollar-value method of pricing inventories for purposes of the LIFO method. "(b)

SIMPLIFIED

DOLLAR-VALUE

METHOD

TORIES.—For purposes of this section—

OF PRICING

INVEN-

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