Page:United States Statutes at Large Volume 92 Part 3.djvu/229

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2861

"(i) in the case of magazines, the period of 2 months and 15 days first occurring after the close of taxable year, or "(ii) in the case of paperbacks and records, the period of 4 months and 15 days first occurring after the close of the taxable year. "(B) The taxpayer may select a shorter period than the applicable period set forth in subparagraph (A). "(C) Any change in the merchandise return period shall be treated as a change in the method of accounting. "(8)

CERTAIN EVIDENCE MAY BE SUBSTITUTED FOR PHYSICAL

RETURN OF MERCHANDISE.—Under regulations prescribed by the Secretary, the taxpayer may substitute, for the physical return of magazines, paperbacks, or records required by subsection (a), certification or other evidence that the magazine, paperback, or record has not been resold and will not be resold if such evidence— "(A) is in the possession of the taxpayer at the close of the merchandise return period, and "(B) is satisfactory to the Secretary. "(9) REPURCHASED BY THE TAXPAYER NOT TREATED AS RESALE.—

A repurchase by the taxpayer shall be treated as an adjustment of the sales price rather than as a resale. "(c) QUALIFIED SALES TO WHICH SECTION APPLIES.— "(1) ELECTION OF BENEFITS.—This section shall

apply to qualified sales of magazines, paperbacks, or records, as the case may be, if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such sales are made. An election under this section may be made without the consent of the Secretary. The election shall be made in such manner as the Secretary may by regulations prescribed and shall be made for any taxable year not later than the time prescribed by law for filing the return for such taxable year (including extensions thereof). "(2) SCOPE OP ELECTION.—An election made under this section shall apply to all qualified sales of magazines, paperbacks, or records, as the case may be, made in connection with the trade or business with respect to which the taxpayer has made the election. "(3) PERIOD TO WHICH ELECTION APPLIES.—An election under this section shall be effective for the taxable year for which it is made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to the revocation of such election. "(4) TREATMENT AS METHOD OF ACCOUNTING.—Except to

the

extent inconsistent with the provisions of this section, for purposes of this subtitle, the computation of taxable income under an election made under this section shall be treated as a method of accounting. "(d) 5-YEAR SPREAD OP TRANSITIONAL ADJUSTMENTS FOR MAGA-

ZINES.—In applying section 481(c) with respect to any election under this section which applies to magazines, the period for taking into account any decrease in taxable income resulting from the application of section 481(a)(2) shall be the taxable year for which the election is made and the 4 succeeding taxable years. "(e) SUSPENSE ACCOUNT FOR PAPERBACKS AND RECORDS.—

26 USC 481.

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