Page:United States Statutes at Large Volume 72 Part 1.djvu/1669

 72 S T A T. ]

PUBLIC LAW 85-866-SEPT. 2, 1968

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count by the taxpayer in computing taxable income in the manner provided in subparagraph (B), but only if such net amount of such adjustment would increase the taxable income of such taxpayer by more than $3,000. "(B)

YEARS IN WHICH AMOUNTS ARE TO BE TAKEN INTO

ACCOUNT.—One-tenth of the net amount of the adjustments described in subparagraph (A) shall (except as provided in subparagraph (C)) be taken into account in each of the 10 taxable years beginning with the year of the change. The amount to be taken into account for each taxable year in the 10-year period shall be taken into account whether or not for such year the assessment of tax is prevented by operation of any law or rule of law. If the year of the change was a taxable year ending before January 1, 1958, and if the taxpayer so elects (at such time and in such manner as the Secretary or his delegate shall by regulations prescribe), the 10-year period shall begin with the first taxable year which begins after December 31, 1957. If the taxpayer elects under the preceding sentence to begin the 10-year period with the first taxable year which begins after December 31, 1957, the 10-year period shall be reduced by the number of years, beginning with the year of the change, in respect of which assessment of tax is prevented by operation of any law or rule of law on the date of the enactment of the Technical Amendments Act of 1958. "(C)

LIMITATION ON YEARS I N WHICH ADJUSTMENTS CAN

BE TAKEN INTO ACCOUNT.—The net amount of any adjustments described in subparagraph (A), to the extent not taken into account in prior taxable years under subparagraph (B) — " (i) in the case of a taxpayer who is an individual, shall be taken into account in the taxable year in which he dies or ceases to engage in a trade or business, "(ii) in the case of a taxpayer who is a partner, his distributive share of such net amount shall be taken into account in the taxable year in which the partnership terminates, or in which the entire interest of such partner is transferred or liquidated, or "(iii) in the case of a taxpayer who is a corporation, shall be taken into account in the taxable year m which such corporation ceases to engage in a trade or business unless such net amount of such adjustment is required to be taken into account by the acquiring corporation under section 381(c) (21). "(D)

TERMINATION or

APPLICATION OF PARAGRAPH.—The

provisions of this paragraph shall not apply with respect to changes in methods of accounting made in taxable years beginning after December 31, 1963. "(5) SPECIAL RULE FOR PRE-1954 ADJUSTMENTS IN CASE OF CERTAIN DECEDENTS.—A change from the cash receipts and disburse-

ments method to the accrual method in any case involving the use of inventories, made on or after August 16, 1954, and before January 1, 1958, for a taxable year to which this section applies, by the executor or administrator of a decedent's estate in the first return filed by such executor or administrator on behalf of the decedent, shall be given effect in determining taxable income (other than for the purpose of computing a net operating loss carryback to any prior taxable year of the decedent), and, if the net amount of any adjustments required by subsection (a) in

26 USC 38i.

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