Page:United States Statutes at Large Volume 92 Part 3.djvu/232

 92 STAT. 2864

PUBLIC LAW 95-600—NOV. 6, 1978 »

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«(A) ^jjg lesser of— "(i) the amount of the discount provided by the terms of the coupon, or "(ii) the amount incurred by the taxpayer for paying such discount, plus "(B) the amount incurred by the taxpayer for a payment to the retailer (or other person redeeming the coupon from the person receiving the price discount), but only if the amount so payable is stated on the coupon. "(2) REDEMPTION PERIOD.—

"(A) IN GENERAL.—Except as provided in subparagraph (B), the redemption period for any taxable year is the 6month period immediately following the close of the taxable year. "(B) TAXPAYER MAY SELECT SHORTER PERIOD.—The taxpayer may select a redemption period which is shorter than 6 months. "(C) CHANGE IN REDEMPTION PERIOD.—Any change in the

redemption period shall be treated as a change in the method of accounting. "(d) QUALIFIED DISCOUNT COUPONS TO WHICH SECTION APPLIES.— "(1) ELECTION OF BENEFITS.—This section shall apply to quali-

fied discount coupons if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such coupons are issued. 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 prescribe 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 OF ELECTION.—An election made under this section shall apply to all qualified discount coupons issued 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 apply to 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. "(e) SUSPENSE ACCOUNT.—

26 USC 481.

"(1) IN GENERAL.—In the case of any election under this section which (but for this subsection) would result in a net decrease in taxable income under section 481(a)(2), in lieu of applying section 481, the taxpayer shall establish a suspense account for the trade or business for the taxable year for which the election is made. "(2) INITIAL OPENING BALANCE.—The initial opening balance of

the account described in paragraph (1) for the first taxable year to which the election applies shall be the amount by which— "(A) the largest dollar amount which would have been taken into account under subsection (a)(1) for any of the 3 immediately preceding taxable years if this section had applied to such 3 preceding taxable years, exceeds

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