Page:United States Statutes at Large Volume 72 Part 1.djvu/1670

 1628

26 USC 481.

26 USC 381.

PUBLIC LAW 85-866-SEPT. 2, 1958

[72 S T A T.

respect of taxable years to which this section does not apply would increase the taxable income of the decedent by more than $3,000, then the tax attributable to such net adjustments shall not exceed an amount equal to the tax that would have been payable on the cash receipts and disbursements method for the years for which the executor or administrator filed returns on behalf of the decedent, computed for each such year as though a ratable portion of the taxable income for such year had been received in each of 10 taxable years beginning and ending on the same dates as the taxable year for which the tax is being computed. "(6) APPLICATION or PARAGRAPH (4).—Paragraph (4) shall not apply with respect to any taxpayer, if the taxpayer elects to take the net amount of the adjustments described in paragraph (4)(A) into account in the manner provided by paragraph (1) or (2). An election to take the net amount of such adjustments into account in the manner provided by paragraph (1) or (2) may be made only if the taxpayer consents in writing to the assessment, within such period as may be agreed on with the Secretary or his delegate, of any deficiency for the year of the change, to the extent attributable to taking the net amount of the adjustments described in paragraph (4)(A) into account in the manner provided by paragraph (1) or (2), even though at the time of filing such consent the assessment of such deficiency would otherwise be prevented by the operation of any law or rule of law. An election'under this paragraph shall be made at such tim.e and in such manner as the Secretary or his delegate shall by regulations prescribe." (b) TECHNICAL AMENDMENTS.—Section 481(b) (relating to limitation on tax where adjustments are substantial) is amended— (1) By inserting after "subsection (a)(2) " each place it appears in paragraph (1) or (2) the following: ", other than the amount of such adjustments to which paragraph (4) or (5) applies,". (2) By striking out "the aggregate of the taxes" in paragraph (1) and inserting in lieu thereof "the aggregate increase in the taxes". (3) By striking out "which would result if one-third of such increase" in paragraph (1) and inserting in lieu thereof "which would result if one-third of such increase in taxable income". (4) By inserting after "the net increase in the taxes under this chapter" in paragraph (2) the following: " ( o r under the corresponding provisions of prior revenue laws)". (5) By striking out "paragraph (2) " each place it appears in paragraph (3)(A) and inserting in lieu thereof "paragraph (1) or (2) ". ((.^ AMENDMENT or SECTION 381 (c).—Section 381(c) (relating to items of distributor or transferor corporation in certain corporate acquisitions) is amended by adding at the end thereof the following new paragraph: "(21)

P R E - 1954 ADJUSTMENTS RESULTING FROM CHANGE I N METH-

OD OF ACCOUNTING.—The acquiring corporation shall take into account any net amount of any adjustment described in section 481 (b)(4) of the distributor or transferor corporation— " (A) to the extent such net amount of such adjustment has not been taken into account by the distributor or transferor corporation, and " (B) in the same manner and at the same time as such net amount would have been taken into account by the distributor or transferor corporation."

�