Taxable Years
Beginning in 1943

If

treat such increase as income
ceived in such taxable year.
any such election is made with re-
spect to any such obligation, it shall
apply also to all such obligations
owned by the taxpayer at the be-
ginning of the first taxable year to
which it applies and to all such
obligations thereafter acquired by
him and shall be binding for all
subsequent taxable years, unless
upon application by the taxpayer
the Commissioner permits him, sub-
ject to such conditions the
Commissioner deems necessary, to
change to a different method. In
the case of any such obligations
owned by the taxpayer at the begin.
ning of the first taxable year to
which his election applies, the in-
crease in the redemption price of
such obligations occurring between
the date of acquisition and the first
day of such taxable year shall also
be treated as income received in
such taxable year.

as

re-treat such increase as income re-treat such increase as income re-
ceived in such taxable year. If ceived in such taxable year. If
any such election is made with re- any such election is made with re-
spect to any such obligation, it shall spect to any such obligation, it shall
apply also to all such obligations apply also to all such obligations
owned by the taxpayer at the be- owned by the taxpayer at the be-
ginning of the first taxable year to ginning of the first taxable year to
which it applies and to all such which it applies and to all such
obligations thereafter acquired by obligations thereafter acquired by
him and shall be binding for all him and shall be binding for_all
subsequent taxable years, unless subsequent taxable years, unless
upon application by the taxpayer upon application by the taxpayer
the Commissioner permits him, sub- the Commissioner permits him, sub-
ject to
as
such conditions the ject to such conditions as
Commissioner deems necessary, to Commissioner deems necessary, to
change to a different method. In change to a different method.
the case of any such obligations the case of any such obligations
owned by the taxpayer at the begin- owned by the taxpayer at the begin-
ning of the first taxable year to ning of the first taxable year to
which his election applies, the in- which his election applies, the in-
crease in the redemption price of crease in the redemption price of
such obligations occurring between such obligations occurring between
the date of acquisition and the first the date of acquisition and the first
day of such taxable year shall also day of such taxable year shall also
be treated as income received in be treated as income received in
such taxable year.
such taxable year.

Sec. 42. (c) Short-term obligations issued on discount basis. In the case of any obligation of the United States or any of its possessions, or of a State or Territory, or any political subdivision thereof, or of the District of Columbia, issued on or after March 1, 1941, on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, the amount of discount at which such obligation is originally sold shall not be considered to accrue until the date on which such obligation is paid at maturity, sold, or otherwise disposed of.

Sec. 42 (b), I. R. C., supra, amended by Sec. 114, R. A. as above.

of

read 1941, to Sec. 118 of said Act makes amendment applicable to taxable after years beginning

Dec. 31, 1940.

Sec. 42 (c), I. R. C., supra, added to I. R. C. by Sec. 115 (a), R. A. of 1941, approved Sept. 20, 1941. Sec. 115 (c) of said Act makes amendment applicable with respect to taxable years ending after Feb. 28, 1941.

the

In

Sec. 42. (c) Short-term obliga- Sec. 42. (c) Short-term obligations issued on discount basis.-In tions issued on discount basis.the case of any obligation of the In the case of any obligation of United States or any of its posses- the United States or any of its possions, or of a State or Territory, sessions, or of a State or Territory, or any political subdivision thereof, or any political subdivision thereof, or of the District of Columbia, is- or of the District of Columbia, issued on or after March 1, 1941, on sued on or after March 1, 1941, on a discount basis and payable with a discount basis and payable without interest at a fixed maturity date out interest at a fixed maturity date not exceeding one year from the not exceeding one year from the date of issue, the amount of dis- date of issue, the amount of discount at which such obligation is count at which such obligation is originally sold shall not be con- originally sold shall not be considered to accrue until the date on sidered to accrue until the date on which such obligation is paid at which such obligation is paid at maturity, sold, or otherwise dis- maturity, sold, or otherwise disposed of. posed of.

Sec. 42 (a) and (b), I. R. C., supra, amended by Sec. 114, R. A. of 1941, by adding words "(a) General rule.-" in first paragraph and by adding subsection (b). Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940.

Sec. 42 (c), I. R. C. supra, added to I. R. C. by Sec. 115 (a), R. A. of 1941, approved Sept. 20, 1941. Sec. 115 (c) of said Act makes amendment applicable with respect to taxable years ending after Feb. 28, 1941.

Sec. 42, I. R. C., amended by Sec. 114, of

supra, R. A. words

1941, by adding "(a) General rule.- in first

paragraph and by adding

subsection (b). Sec. 118 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1940.

Sec. 42 (c), I. R. C., supra, added to I. R. C. by Sec. 115 (a), R. A. of 1941, approved Sept. 20, 1941. Sec. 115 (c) of said Act makes amendment applicable with respect to taxable years ending after Feb. 28, 1941.

Taxable Years
Beginning in 1943

Sec. 43. Period for which deductions and credits taken.

The deductions and credits (other) than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer whose net income is computed upon the basis of the accrual method of accounting, amounts (except amounts includible in computing a partner's net income under section 182) accrued as deductions and credits only by reason of the death of the taxpayer shall not be allowed in computing net income for the period in which falls the date of the taxpayer's death.

Sec. 43, I. R. C., supra, amended by Sec. 134 (b), R. A. of 1942, to read as above. Sec. 134 (f) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1942.

For Sec. 43, I. R. C., before amendment, see 1942 column.

Taxable Years
Beginning in 1942

Sec. 43. Period for which deductions and credits taken.

The deductions and credits (other than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death (except deductions under section 23 (o)) if not otherwise properly allowable in respect of such period or a prior period.

Taxable Years
Beginning in 1941

Sec. 43. Period for which deductions and credits taken.

The deductions and credits (other than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death (except deductions under section 23 (o)) if not otherwise properly allowable in respect of such period or a prior period.

Sec. 44. (a) Dealers in personal Sec. 44. (a) Dealers in personal Sec. 44. (a) Dealers in personal property. Under regulations pre- property.-Under regulations pre- property.-Under regulations prescribed by the Commissioner with scribed by the Commissioner with scribed by the Commissioner with the approval of the Secretary, a the approval of the Secretary, a the approval of the Secretary, a person who regularly sells or other- person who regularly sells or other- person who regularly sells or otherwise disposes of personal property wise disposes of personal property wise disposes of personal property on the installment plan may return on the installment plan may return on the installment plan may return as income therefrom in any taxable as income therefrom in any taxable as income therefrom in any taxable year that proportion of the install-year that proportion of the install-year that proportion of the installment payments actually received in ment payments actually received in ment payments actually received in that year which the gross profit that year which the gross profit that year which the gross profit realized or to be realized when pay- realized or to be realized when pay- realized or to be realized when payment is completed, bears to the total ment is completed, bears to the total ment is completed, bears to the total contract price. contract price. contract price.

Taxable Years
Beginning in 1940

Sec. 43. Period for which deductions and credits taken.

The deductions and credits (other than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death (except deductions under section 23 (o)) if not otherwise properly allowable in respect of such period or a prior period.

Taxable Years
Beginning in 1939

Sec. 43. Period for which deductions and credits taken.

The deductions and credits (other than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death (except deductions under section 23 (o)) if not otherwise properly allowable in respect of such period or a prior period.

Taxable Years
Beginning before 1939

Sec. 43. Period for which deductions and credits taken.

See p. 88, Eighth Edition.

Sec. 44. (a) Dealers in personal Sec. 44. (a) Dealers in personal property. Under regulations pre- property.-Under regulations prescribed by the Commissioner with scribed by the Commissioner with the approval of the Secretary, a the approval of the Secretary, a person who regularly sells or other- person who regularly sells or otherwise disposes of personal property wise disposes of personal property on the installment plan may return on the installment plan may return as income therefrom in any taxable as income therefrom in any taxable year that proportion of the install-year that proportion of the installment payments actually received in ment payments actually received in that year which the gross profit that year which the gross profit realized or to be realized when pay-realized or to be realized when payment is completed, bears to the total ment is completed, bears to the total contract price. contract price.

Sec. 44. Installment basis.

Sec. 44. (a) Dealers in personal property.

See p. 88, Eighth Edition.

Taxable Years
Beginning in 1943

Sec. 44. (b) Sales of realty and

Sec. 44. (b) Sales of realty and Sec. 44. (b) Sales of realty and casual sales of personalty. In casual sales of personalty.-In casual sales of personalty.-In the case (1) of a casual sale or the case (1) of a casual sale or the case (1) of a casual sale or other casual disposition of personal other casual disposition of personal other casual disposition of personal property (other than property of property (other than property of property (other than property of a kind which would properly be in- a kind which would properly be in- a kind which would properly be included in the inventory of the tax- cluded in the inventory of the tax- cluded in the inventory of the taxpayer if on hand at the close of the payer if on hand at the close of the payer if on hand at the close of the taxable year), for a price exceeding taxable year), for a price exceeding taxable year), for a price exceeding $1,000, or (2) of a sale or other $1,000, or (2) of a sale or other $1,000, or (2) of a sale or other disposition of real property, if in disposition of real property, if in disposition of real property, if in either case the initial payments do either case the initial payments do either case the initial payments do not exceed 30 per centum of the not exceed 30 per centum of the not exceed 30 per centum of the selling price (or, in case the sale or selling price (or, in case the sale or selling price (or, in case the sale or other disposition was in a taxable other disposition was in a taxable other disposition was in a taxable year beginning prior to January 1, vear beginning prior to January 1, year beginning prior to January 1, 1934, the percentage of the selling 1934, the percentage of the selling 1934, the percentage of the selling price prescribed in the law appli- price prescribed in the law appli- price prescribed in the law applicable to such year), the income may, cable to such year), the income may, cable to such year), the income may, under regulations prescribed by the under regulations prescribed by the under regulations prescribed by the Commissioner with the approval of Commissioner with the approval of Commissioner with the approval of the Secretary, be returned on the the Secretary, be returned on the the Secretary, be returned on the basis and in the manner above pre-basis and in the manner above pre- basis and in the manner above prescribed in this section. As used in scribed in this section. As used in scribed in this section. As used in this section the term "initial paythis section the term "initial payments" means the payments received ments" means the payments received in cash or property other than eviin cash or property other than evidences of indebtedness of the purdences of indebtedness of the purchaser during the taxable period in chaser during the taxable period in which the sale or other disposition which the sale or other disposition

is made.

this section the term "initial pay-
ments" means the payments received
in cash or property other than evi-
dences of indebtedness of the pur-
chaser during the taxable period in
which the sale or other disposition

is made.

is made.

Sec. 44. (c) Change from accrual Sec. 44. (c) Change from accrual Sec. 44. (c) Change from accrual to installment basis.-If a tax- to installment basis.-If a tax- to installment basis.-If a taxpayer entitled to the benefits of sub- payer entitled to the benefits of sub-payer entitled to the benefits of subsection (a) elects for any taxable section (a) elects for any taxable section (a) elects for any taxable year to report his net income on the year to report his net income on the year to report his net income on the installment basis, then in comput- installment basis, then in comput- installment basis, then in computing his income for the year of ing his income for the year of ing his income for the year of change or any subsequent year, change or any subsequent year, change or any subsequent year, amounts actually received during amounts actually received during amounts actually received during any such year on account of sales any such year on account of sales any such year on account of sales or other dispositions of property or other dispositions of property or other dispositions of property made in any prior year shall not be made in any prior year shall not be made in any prior year shall not be excluded.

excluded.

Sec. 44. (d) Gain or loss, upon disposition of installment obliga

excluded.

Sec. 44. (d) Gain or loss, upon Sec. 44. (d) Gain or loss, upon disposition of installment obligadisposition of installment obligations. If an installment obligation tions.—If an installment obligation tions.-If an installment obligation is satisfied at other than its face is satisfied at other than its face is satisfied at other than its face value or distributed, transmitted, value or distributed, transmitted, value or distributed, transmitted, sold, or otherwise disposed of, gain sold, or otherwise disposed of, gain sold, or otherwise disposed of, gain or loss shall result to the extent of or loss shall result to the extent of or loss shall result to the extent of the difference between the basis of the difference between the basis of the difference between the basis of the obligation and (1) in the case the obligation and (1) in the case the obligation and (1) in the case of satisfaction at other than face of satisfaction at other than face of satisfaction at other than face value or a sale or exchange the value or a sale or exchange the value or a sale or exchange-the amount realized, or (2) in case of amount realized, or (2) in case of amount realized, or (2) in case of a distribution, transmission, or dis- a distribution, transmission, or dis- a distribution, transmission, or disposition otherwise than by sale or position otherwise than by sale or position otherwise than by sale or exchange the fair market value of exchange the fair market value of exchange the fair market value of the obligation at the time of such the obligation at the time of such the obligation at the time of such distribution, transmission, or dis- distribution, transmission, or dis- distribution, transmission, or disposition. Any gain or loss so re- position. Any gain or loss so re-position. Any gain or loss so resulting shall be considered as result-sulting shall be considered as result-sulting shall be considered as result