Page:United States Statutes at Large Volume 48 Part 1.djvu/720

 694 73d CONGRESS. SESS. II. CH. 277 . MAY 10, 1934 . INCO ME TAX. ACCOUN TING Part IVAccounting Pe riod s and Me thod s of Acc ount ing PERIODS AND METHODS. SEC. 41. GEN ERAL RULE. General rule. Net income on basis of annual accounting period. If accounting is other than fiscal year . Poet. P. 898. Inventories, p. 688 . Gross income. The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in acco rdan ce w ith the meth od of ac coun ting reg ular ly employed in keepin g the books of such taxpaye r ; but if no such method of account ing has be en so empl oyed, or if the meth od employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner do es cl ea rly reflect the income. If the taxpayer's annual accounting period is other than a fiscal year as defined in section 48 or if the taxpayer has no annual accounting period or does not kee p books, the net income shall be compute d on the basis o f the calendar year. (For use of inventories, see section 22 (c) .) SEC. 42. PERIOD IN WH ICH ITEMS OF GROSS INCOME INCLUDED. Items for tax ab le The amount of all items of gross income shall be included in the year in which received. gross i ncome fo r the ta xable ye ar in wh ich rece ived by the taxp ayer, unless, under methods of accounting permitted under section 41, any such amounts are to be properly accounted for as of a different Portion, in case of period. In the case of the death of a taxpayer there shall be included death. in computing net income for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly includible in respect of such period or a prior per iod. Deductions and cred- SEC. 43. PERIOD FOR WHICH DEDUCTIONS AND CREDITS TAKEN. its. For tax able year in which "paid or ac- The deductions and credits provided for in this title shall be taken trued" or "paid or fn- for the taxable year in which "paid or accrued" or "paid or cu rred ." incur red ", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different Alxpayer e on death of taxpayer. period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly allowable in respect of such period or a prior period. Installment basis. SEC. 44. IN STALLM ENT BASIS. Dealers in personal property. Sales of realty and casual sale ., of person- alty. (a) DEALERS IN PERSONAL PROPERTY .-Under re gula tion s pr e- scribed by the Commissioner with the approval of the Secretary, a person who regularly sells or otherwise disposes of personal property on the in stal lmen t pl an may return as inc ome the refr om in any taxable year that proportion of the installment payments actually received in that year which the gross profit realized or to be realized when pay ment is complete d, bears to the total con tract pr ice. (b) SALES OF REALTY AND CASUAL SALES OF PER SON ALTY .-I n the case (1) of a casual sale or other casual disposition of personal property (other than property of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxa ble year ), for a price e xceeding $1,000, or (2) o f a sale or other disposition of real property, if in either case the initial pay- ments do not exceed 30 per centum of the selling price (or, in case the sale or other disposition was in a taxable year beginning prior to January 1, 1934, the percentage of the selling price prescribed in the law applicable to such year), the income may, under regulations prescribed by the Commissioner with the approval of the Secretary, be returned on the basis and in the manner above prescribed in this