Page:United States Statutes at Large Volume 90 Part 2.djvu/72

 90 STAT. 1540

PUBLIC LAW 94-455—OCT. 4, 1976 subsidiary of such second corporation) owned, directly or indirectly, by or for the first corporation, in that proportion which the value of the stock in the first corporation which such members so own bears to the value of all the stock i n the first corporation. For purposes of paragraph (1), individuals related by the half blood or by legal adoption shall be treated as if they were related by the whole blood. " (e) CORPORATIONS H A VI N G GROSS KECEIPTS OF $1,000,000 OR L E S S. —

26 USC 1563.

A corporation meets the requirements of this subsection if, for each p r i o r taxable year beginning after December 31, 1975, such corporation (and any predecessor corporation) did not have gross receipts exceeding $1,000,000. For purposes of the preceding sentence, all corporations which are members of a controlled g r o u p of corporations (within the meaning of section 1563(a)) shall be treated as one corporation. "(f)

COORDINATION W I T H SECTION 481.—In the case of any tax p a y e r

required by this section to change its method of accounting for any taxable year— " (1) such change shall be treated as having been made with the consent of the Secretary, " (2) for purposes of section 481(a)(2), such change shall be treated as a change not initiated by the taxpayer, and " (3) under regulations prescribed by the Secretary, the n e t amount of adjustments required by section 481(a) to be taken into account by the taxpayer in computing taxable income shall (except as otherwise provided in such regulations) be taken into account in each of the 10 taxable years beginning with the year of change. " (g) CERTAIN A N N U A L ACCRUAL ACCOUNTING METHODS.— " (1) I N GENEIiAL.—If—

" (A) for its 10 taxable years ending with its first taxable year beginning after December 31, 1975, a corporation used an annual accrual method of accounting with respect to its trade or business of farming, " (B) such corporation raises crops which are harvested not less than 12 months after planting, and " (C) such corporation has used such method of accounting for all taxable years intervening between its first taxable year beginning after December 31, 1975, and the taxable year, such corporation may continue to employ such method of accounting for the taxable year with respect to its trade or business of farming. " (2) A N N U A L ACCRUAL METHOD OF ACCOUNTING DEFINED.—For

purposes of paragraph (1), the term 'annual accrual method of accounting' means a method under which revenues, costs, and expenses are computed on an accrual method of accounting and the preproductive expenses incurred during the taxable year are charged to harvested crops or deducted in determining the taxable income for such years. " (3) CERTAIN REORGANIZATIONS.—For purposes of this subsection, if a corporation acquired substantially all the assets of a farming trade or business from another corporation in a transaction in which n o gain or loss was recognized to the transferor or transferee corporation, the transferee corporation shall be deemed to have computed its taxable income on an annual accrual method of accounting during the period for which the transferor corporation computed its taxable income from such trade or business on a n annual accrual method."

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