Page:United States Statutes at Large Volume 47 Part 1.djvu/210

 186 72d CONGRESS. SESS. I. CH. 209. JUN E 6, 1932 . INCOME TAX ab le year that proportion of the installment payments actually received in that year which the gross profit realized or to be realized when payment is completed, bears to the total contract price. Returns of income (b) SALES OF REALTY AND CASUAL SALES OF PERSONALTY ;In the from casual sales of case (1) of a casual sale or other casual disposition of personal personalty or of realty. property ( other than prop erty of a kind which would pro perly be included in the inventory of the taxpayer if on hand at the close of the taxable year), for a price exceeding $1,000, or (2) of a sale or other disposition of real property, if in either case the initial pay- ments do no t exceed 40 per centum of the s elling price, th e income may, under regulations prescribed by the Com mis sio ner wi th the app rov al o f the Secretary, b e returned on th e basis and in th e manner above prescribed in this section. As used in this section the term " initial payments " means the payments received in cash or property other than evidences of indebtedness of the purchaser during the taxable per iod in which the sale or other dis position is made. Computation of (C) C HANGE FROM A CCRUAL TO INSTALLMENT BASIs .- If a taxpayer income change to installment basis. entitled to the benefits of subsection (a) elects for any taxable year to report h is net income on the installment b asis, then in co mputing his income for the year of change or any subsequent year, amounts actu- ally received during any such year on account of sales or other dispositions of property made in any prior year shall not be excluded. Gain or loss upon di sposi tion o f (d) GA IN OR Loss UP ON DIS POS ITI ON OF INS TAL LME NT OBL IGA - install- me nt ob ligati ons. TIONS.-If an installment obligation is satisfied at other than its face value or distributed, transmitted, sold, or otherwise disposed of, gain or loss shall result to the extent of the difference between the basis of the oblig ation and (1) in t he case of satisf a'etion at other t han face value or a sale or exchange -the amount rea lized, or (2) in case of a distribution, transmission, or disposition otherwise than by sale or exchange -the fair market value of the o bligation at the time of Basis. such distribution, transmission, or disposition. The bas is of the obligation shall be the excess of the face value of the obligation over an amount equal to the income which would be returnable were the death n otm in ssion stallme t obligation satisfied in full. This subsection shall not apply to the obligations. transmission at death of installment obligations if there is filed with the Commissioner, at such time as he may by regulation prescribe, a bond in such amount and with such sureties as he may deem neces- sary, conditioned upon the return as income, by the person receiving any payment on such obligations, of the same proportion of such payment as wou ld be returnabl e as income by t he decedent if h e had lived and had received such payment. Allocation of income SEC. 45. AL LOCATION OF I NCOME AND DED UCTIONS. and deductions. Pro- visions if same interests In any case of two or more trades or businesses (whether or not b control usi ne two or more whether or not organized in the United States, and businesses . inc orp orat ed, whether or not affiliated) owne d or controlled d irectly or indir ectly by the same interests, the Commissioner is authorized to distribute, apportion, or allocate gross income or deduct ions between or among such trades or businesses, if he determines that such distribution, apportionment, or allocation is necessary in ord er to prevent ev asion of taxes or clearly to reflect the income of any of such trades or businesses. Change of accounting SEC. 46. CHANGE OF AC COUNTING PERI OD. period. Net means comput- If a taxpayer changes his accounting period from fiscal year to pe on basis of new period. calendar year, from calendar year to fiscal or from one fiscal year to anothr, the net income shall, with thyear, aproval of the Com- missioner, be computed on the basis of such n ew accounting pe riod, subject to the provisions of section 47.