Page:United States Statutes at Large Volume 48 Part 1.djvu/721

 73d C ONGRESS. SESS. II. CH. 27 17. MAY 10, 1934 . section. As used in this section the term " initial payments " means the payments received in cash or property other than evidences of indeb tedne ss of the purc haser dur ing t he ta xable per iod i n whi ch the sale or other disposition is made. (C) CHANGE FROM ACCRUAL TO INSTALLMENT BASIS .-If a taxpayer entitled to the benefits of subsection (a) elects for any taxable year to report his net income on the installment basis, then in computing his income for the year of change or any subsequent year, amounts actually received during any such year on account of sales or other dispositions of property made in any prior year shall not be exclu ded. (d) GAIN OR Loss UPON DISPOSITION Or INSTALLMENT OBLIGA- 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 obligation and (1) in the case of satisfaction at other than face value or a sale or exchange-the amount realized, or (2) in case of a distribution, transmission, or disposition otherwise than by sale or exchange-the fair market value of the obligation at the time of such distribution, transmission, or disposition. Any gain or loss so resul ting s hall b e cons idered as res ulting from the sa le or exchange of the property in respect of which the installment obli- gation was received. The basis of the obligation shall be the excess of the face value of the obligation over ail amount equal to the income which would be returnable were the obligation satisfied in full. This subsection shall not apply to the transmission at death of installment obligations if there is filed with the Commissioner, at such ti me as he may by re gulati on pre scribe, a, bo nd in such a mount and with such sureties as he may deem necessary, conditioned upon the return as income, by the person receiving any payment on such obligations, of the same proportion of such payment as would be returnable as income by the decedent if he had lived and had received such payment. SEC. 45. ALLO CAT ION OF INC OME AND DEDUCTIONS. In any case of two or more organizations, trades, or businesses (whether or not incorporated, whether or not organized in the United States, and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the Commissioner is autho rized to d istr ibute, app orti on, o r all ocate gro ss in come or deduc tions betw een or am ong s uch organ izati ons, trad es, o r bus i- nesses, if he determines that such distribution, apportionment, or allocatio n is nece ssary in order to prevent e vasion of taxes or clearly to reflect the income of any of such organizations, trades, or busi- nesses. SEC. 46. CHANG E OF ACCOUNTIN G PERIOD. If a taxpayer changes his accounting period from fiscal year to calendar year, from calendar year to fiscal year, or from one fiscal year to another, the net income shall, with the approval of the Com- missioner, be computed on the basis of such new accounting period, subject to the pr ovisions of sectio n 47. SEC. 47. RETURNS FOR A PERIOD OF LESS THAN TWELVE MONTHS. (a) RET URN S FOR SH ORT PE RIOD RESULTING FR OM CHANGE OF ACCOUNTING PERIOD .-If a taxpayer, with the approval of the Cori- missi oner, chan ges the b asis of c omput ing n et in come from fisc al year to calendar year a separate return shall be made for the period between the close of the last fiscal year for which return was made 695 INCOME TA X, ACCO UNT ING P ERI ODS AND MET HODS-Contd. Computation on change to installment basis. G ain or loss upon disposition of install- ment obligations. Transmission at death of installment obligations. Allocation of income and deductions. Provisions, if same interests control two or more businesses. Change of accounting period. Net incom e com - puted on basis of new period. Returns for le ss than ayear. Bas is of com put ing when accounting pe. riod changes.