Page:United States Statutes at Large Volume 53 Part 2.djvu/617

 53 STAT.] 76TH CONG., 1ST SESS.-CH. 367-JULY 26, 1939 method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the assessor does clearly reflect the income. If the taxpayer's annual accounting period is other than a fiscal year as defined in section 43 or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year. If the taxpayer makes a Federal income-tax return, his income shall be computed, for the purposes of this title, on the basis of the same calendar or fiscal year as in such Federal income-tax return. PERIOD IN WHICH ITEMS OF GROSS INCOME INCLUDED SEC. 11. The amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer unless, under methods of accounting permitted under sec- tion 10, any such amounts are to be properly accounted for as of a different period. In the case of the death of a taxpayer there shall be included, 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 to such period or a prior period. PERIOD FOR WTHICH DEDUCTIONS AND CREDITS TAKEN SEC. 12. The deductions and credits provided for in this title shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", 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 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 to such period or a prior period. INSTALLMENT BASIS SEC. 13. (a) DEALFRS IN PERSONAL PROPERTY.- Under regulations prescribed by the Commissioners, a person who regularly sells or otherwise disposes of personal property on the installment plan may return as income therefrom 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 payment is completed bears to the total contract price. (b) SALES OF REALTY AND CASUAL SALES OF PERSONALTY.--In the case of (1) a casual sale or other casual disposition of personal prop- erty (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 taxable year) for a price exceeding $1,000, or (2) of a sale or other disposi- tion of real property, if in either case the initial payments do not exceed 30 per centum of the selling price, the income may, under regulations prescribed by the Commissioners, be returned on the basis and in the 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 pur- chaser during the taxable period in which 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 Calendar year, if no other accounting pe- riod. Post, p. 1106. Computation, if tax- payer makes a Federal income-tax return. Period in which items of gross income included. In case of death of taxpayer. For taxable year in which "paid or ac- crued" or "paid or incurred." Allowance on death of taxpayer. I),:l!,rs in personal property. Sales of realty and casual sales of per- sonalty. "Initial payments" defined. Change from accru- al to installment basis; computation.

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