Page:United States Statutes at Large Volume 83.djvu/595

 83 STAT. ]

PUBLIC LAW 91-172-DEC. 30, 1969

" (B) after applying paragraph (2) or subparagraph (A) of this paragraph (as the case may be), an amount equal to the sum of the amounts treated, solely by reason of the application of subsection (c), as gain from the sale or exchange of property which is neither a capital asset nor property described in section 1231. "(4)

EXCEPTION FOR TAXPAYERS USING CERTAIN ACCOUNTING

567

esA Stat. 325. 26 USC 1231.

METHODS.—

" (A) GENERAL, RULE.—Except to the extent that the taxpayer has succeeded to an excess deductions account as provided in paragraph (5), additions to the excess deductions account shall not be required by a taxpayer who elects to compute taxable income from farming (i) by using inventories, and (ii) by charging to capital account all expenditures paid or incurred which are properly chargeable to capital account (including such expenditures which the taxpayer may, under this chapter or regulations prescribed thereunder, otherwise treat or elect to treat as expenditures which are not chargeable to capital account). " (B) T I M E, MANNER, AND EFFECT or ELECTION.—An election under subparagraph (A) for any taxable year shall be filed within the time prescribed by law (including extensions thereof) for filing the return for such taxable year, and shall be made and filed in such manner as the Secretary or his delegate shall prescribe by regulations. Such election shall be binding on the taxpayer for such taxable year and for all subsequent taxable years and may not be revoked except with the consent of the Secretary or his delegate. " (C) CHANGE or METHOD or ACCOUNTING, ETC.—If, in order to comply with the election made under subparagraph (A), a taxpayer changes his method of accounting in computing taxable income from the business of farming, such change shall be treated as having been made with the consent of the Secretary or his delegate and for purposes of section 481(a)(2) shall be treated as a change not initiated by the taxpayer. ''(5)

72 Stat. 1626.

TRANSFER OF ACCOUNT.— " (A) CERTAIN CORPORATE TRANSACTIONS.—In the case of

a transfer described in subsection (d)(3) to which section 371 (a), 374 (a), or 381 applies, the acquiring corporation shall 68A Stat. 121, succeed to and take into account as of the close of the day of i^^jro Stat. 402. distribution or transfer, the excess deductions account of the transferor. "(B)

CERTAIN GIFTS.—If—

" (i) farm recapture property is disposed of by gift, and "(ii) the potential gain (as defined in subsection (e) (5)) on farm recapture property disposed of by gift during any one-year period in which any such gift occurs is more than 25 percent of the potential gain on farm recapture property held by the donor immediately prior to the first of such gifts, each donee of the property shall succeed (at the time the first of such gifts is made, but in an amount determined as of the close of the donor's taxable year in which the first of such gifts is made) to the same proportion of the donor's excess deductions account (determined, after the application of paragraphs (2) and (3)

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