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Sec. 44. (b) Sales of realty and

Taxable Years
Beginning before 1939

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.

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
property (other than property of property (other than property of
a kind which would properly be in- a kind which would properly be in-
cluded in the inventory of the tax- cluded in the inventory of the tax-
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
$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
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
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
year beginning prior to January 1, year beginning prior to January 1,
1934, the percentage of the selling 1934, the percentage of the selling
price prescribed in the law appli- price prescribed in the law appli-
cable to such year), the income
cable to such year), the income may,
under regulations prescribed by the under regulations prescribed by the
Commissioner with the approval of Commissioner with the approval of
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-
scribed in this section. As used in scribed in this section. As used in
this section the term "initial pay-
this section the term "initial pay-
ments" means the payments received ments" means the payments received
in cash or property other than evi- in cash or property other than evi-
dences of indebtedness of the purchaser during the taxable period in
dences of indebtedness of the pur-
chaser during the taxable period in
which the sale or other disposition which the sale or other disposition

is made.

may,

is made.

See p. 90, Eighth Edition.

Sec. 44. (c) Change from accrual

See p. 90, Eighth Edition.

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.
payer entitled to the benefits of sub- payer entitled to the benefits of sub-
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
installment basis, then in comput- installment basis, then in comput-
ing his income for the year of ing his income for the year of
change or any subsequent year, change or any subsequent year,
amounts actually received during amounts actually received during
any such year on account of sales any such year on account of sales
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
excluded.

excluded.

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

tions. If an installment obligation tions.-If an installment obligation tions.

is satisfied at other than its face is satisfied at other than its face value or distributed, transmitted, value or distributed, transmitted, 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 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 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 amount realized, or (2) in case of amount realized, or (2) in case of a distribution, transmission, or dis- a distribution, transmission, or disposition otherwise than by sale or position otherwise than by sale or 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 distribution, transmission, or dis- distribution, transmission, or disposition. Any gain or loss so re- position. Any gain or loss so resulting shall be considered as result-sulting shall be considered as result

See p. 90, Eighth Edition.

Taxable Years
Beginning in 1943

Taxable Years
Beginning in 1942

Taxable Years
Beginning in 1941

ing from the sale or exchange of ing from the sale or exchange of ing from the sale or exchange of the property in respect of which the the property in respect of which the the property in respect of which the installment obligation was re- installment obligation was re- installment obligation was received. The basis of the obligation ceived. The basis of the obligation ceived. The basis of the obligation shall be the excess of the face value shall be the excess of the face value shall be the excess of the face value of the obligation over an amount of the obligation over an amount of the obligation over an amount equal to the income which would be equal to the income which would be equal to the income which would be returnable were the obligation sat- returnable were the obligation sat-returnable were the obligation satisfied in full. This subsection shall isfied in full. This subsection shall isfied in full. This subsection shall not apply to the transmission at not apply to the transmission at not apply to the transmission at death of installment obligations if death of installment obligations if death of installment obligations if there is filed with the Commissioner, there is filed with the Commissioner, there is filed with the Commissioner, at such time as he may by regula- at such time as he may by regula- at such time as he may by regulation prescribe, a bond in such tion prescribe, a bond in such tion prescribe, a bond in such amount and with such sureties as he amount and with such sureties as he amount and with such sureties as he may deem necessary, conditioned may deem necessary, conditioned may deem necessary, conditioned upon the return as income, by the upon the return as income, by the upon the return as income, by the person receiving any payment on person receiving any payment on person receiving any payment on such obligations, of the same pro- such obligations, of the same pro- such obligations, of the same proportion of such payment as would portion of such payment as would portion of such payment as would be returnable as income by the be returnable as income by the be returnable as income by the decedent if he had lived and had decedent if he had lived and had decedent if he had lived and had received such payment. If an in- received such payment. If an in- received such payment. If an installment obligation is distributed stallment obligation is distributed stallment obligation is distributed by one corporation to another cor- by one corporation to another cor- by one corporation to another corporation in the course of a liquida-poration in the course of a liquida-poration in the course of a liquidation, and under section 112 (b) tion, and under section 112 (b) tion, and under section 112 (b) (6) no gain or loss with respect to (6) no gain or loss with respect to (6) no gain or loss with respect to the receipt of such obligation is the receipt of such obligation is the receipt of such obligation is recognized in the case of the recip- recognized in the case of the recip- recognized in the case of the recipient corporation, then no gain orient corporation, then no gain or ient corporation, then no gain or loss with respect to the distribution loss with respect to the distribution loss with respect to the distribution of such obligation shall be recog- of such obligation shall be recog- of such obligation shall be recognized in the case of the distributing nized in the case of the distributing nized in the case of the distributing corporation. corporation. corporation.

Sec. 45. Allocation of income and deductions.

Sec. 45. Allocation of income and deductions.

Sec. 45. Allocation of income and deductions.

incorporated, (whether

or not

incorporated,

In any case of two or more or- In any case of two or more orIn any case of two or more organizations, trades, or businesses ganizations, trades, or businesses ganizations, trades, or businesses (whether or not incorporated, (whether or not whether or not organized in the whether or not organized in the whether or not organized in the United States, and whether or not United States, and whether or not United States, and whether or not affiliated) owned or controlled di- affiliated) owned or controlled di- affiliated) owned or controlled directly or indirectly by the same in- rectly or indirectly by the same in-rectly or indirectly by the same interests, the Commissioner is author- terests, the Commissioner is author- terests, the Commissioner is authorized to distribute, apportion, or ized to distribute, apportion, or ized to distribute, apportion, or allocate gross income or deductions allocate gross income or deductions allocate gross income or deductions between or among such organiza- between or among such organiza- between or among such organizations, trades, or businesses, if he tions, trades, or businesses, if he determines that such distribution, determines that such distribution, apportionment, or allocation is nec- apportionment, or allocation is necessary in order to prevent evasion essary in order to prevent evasion of taxes or clearly to reflect the in- of taxes or clearly to reflect the income of any of such organizations, come of any of such organizations, trades, or businesses. trades, or businesses.

Sec. 46. Change of accounting period.

Sec. 46. Change of accounting period.

tions, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses.

Sec. 46. Change of accounting period.

If a taxpayer changes his ac- If a taxpayer changes his ac- If a taxpayer changes his accounting period from fiscal year to counting period from fiscal year to counting period from fiscal year to calendar year, from calendar year calendar year, from calendar year calendar year, from calendar year to fiscal year, or from one fiscal to fiscal year, or from one fiscal to fiscal year, or from one fiscal year to another, the net income year to another, the net income year to another, the net income shall, with the approval of the shall, with the approval of the shall, with the approval of the

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ing from the sale or exchange of ing from the sale or exchange of
the property in respect of which the property in respect of which
the installment obligation was re- the installment obligation was re-
ceived. The basis of the obligation ceived. The basis of the obligation
shall be the excess of the face value shall be the excess of the face value
of the obligation over an amount of the obligation over an amount
equal to the income which would be equal to the income which would be
returnable were the obligation sat-returnable were the obligation satis-
isfied in full. This subsection shall fied in full. This subsection shall
not apply to the transmission at not apply to the transmission at
death of installment obligations if death of installment obligations if
there is filed with the Commissioner, there is filed with the Commissioner,
at such time as he may by regula- at such time as he may by regula-
tion prescribe, a bond in such tion prescribe, a bond in such
amount and with such sureties as he amount and with such sureties as he
may deem necessary, conditioned may deem necessary, conditioned
upon the return as income, by the upon the return as income, by the
person receiving any payment on person receiving any payment on
such obligations, of the same pro- such obligations, of the same pro-
portion of such payment as would portion of such payment as would
be returnable as income by the be returnable as income by the
decedent if he had lived and had decedent if he had lived and had
received such payment. If an in- received such payment. If an in-
stallment obligation is distributed stallment obligation is distributed
by one corporation to another cor- by one corporation to another cor-
poration in the course of a liquida-poration in the course of a liquida-
tion, and under section 112 (b) tion, and under section 112 (b)
(6) no gain or loss with respect to (6) no gain or loss with respect to
the receipt of such obligation is the receipt of such obligation is
recognized in the case of the recip-recognized in the case of the recip-
ient corporation, then no gain orient corporation, then no gain or
loss with respect to the distribution loss with respect to the distribution
of such obligation shall be recog- of such obligation shall be recog-
nized in the case of the distributing nized in the case of the distributing
corporation.
corporation.

Sec. 45. Allocation of income and deductions.

Sec. 45. Allocation of income and deductions.

In any case of two or more or- In any case of two or more organizations, trades, or businesses ganizations, trades, or businesses (whether or not incorporated, (whether or not incorporated, whether or not organized in the whether or not organized in the United States, and whether or not United States, and whether or not affiliated) owned or controlled di- affiliated) owned or controlled directly or indirectly by the same in- rectly or indirectly by the same interests, the Commissioner is author-terests, the Commissioner is authorized to distribute, apportion, or ized to distribute, apportion, or allocate gross income or deductions allocate gross income or deductions between or among such organiza- between or among such organizations, trades, or businesses, if he tions, trades, or businesses, if he determines that such distribution, determines that such distribution, apportionment, or allocation is nec- apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses.

Sec. 46. Change of accounting period.

essary in order to prevent evasion
of taxes or clearly to reflect the in-
come of any of such organizations,
trades, or businesses.

Sec. 46. Change of accounting period.

If a taxpayer changes his ac- If a taxpayer changes his accounting period from fiscal year to counting period from fiscal year to calendar year, from calendar year calendar year, from calendar year to fiscal year, or from one fiscal to fiscal year, or from one fiscal year to another, the net income year to another, the net income shall, with the approval of the shall, with the approval of the

Taxable Years

Beginning before 1939

Sec. 45. Allocation of income and deductions.

See p. 92, Eighth Edition.

Sec. 46. Change of accounting period.

See p. 94, Eighth Edition.

Taxable Years
Beginning in 1943

Commissioner, be computed on the basis of such new accounting period, subject to the provisions of section 47.

Sec. 47. Returns for a period of less than twelve months.

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Commissioner, be computed on the Commissioner, be computed on the
basis of such new accounting pe- basis of such new accounting pe-
riod, subject to the provisions of riod, subject to the provisions of
section 47.
section 47.

Sec. 47. Returns for a period of less than twelve months.

Sec. 47. Returns for a period of less than twelve months.

Sec. 47. (a) Returns for short Sec. 47. (a) Returns for short Sec. 47. (a) Returns for short period resulting from change of period resulting from change of period resulting from change of accounting period. If a taxpayer, accounting period.—If a taxpayer, accounting period. If a taxpayer, with the approval of the Commis- with the approval of the Commis- with the approval of the Commissioner, changes the basis of com- sioner, changes the basis of com- sioner, changes the basis of computing net income from fiscal year puting net income from fiscal year puting net income from fiscal year to calendar year a separate return to calendar year a separate return to calendar year a separate return shall be made for the period be- shall be made for the period be- shall be made for the period between the close of the last fiscal tween the close of the last fiscal tween the close of the last fiscal year for which return was made year for which return was made year for which return was made and the following December 31. and the following December 31. and the following December 31. If the change is from calendar If the change is from calendar If the change is from calendar year to fiscal year, a separate re- year to fiscal year, a separate re- vear to fiscal year, a separate return shall be made for the period turn shall be made for the period turn shall be made for the period between the close of the last calen-between the close of the last calen-between the close of the last calendar year for which return was dar year for which return was dar year for which return made and the date designated as the close of the fiscal year. If the change is from one fiscal year to another fiscal year a separate return shall be made for the period between the close of the former fiscal year and the date designated as the close of the new fiscal year.

Sec. 47. (b) Income computed on basis of short period. Where a separate return is made under subsection (a) on account of a change in the accounting period, and in all other cases where a separate return is required or permitted, by regulations prescribed by the Commissioner with the approval of the Secretary, to be made for a fractional part of a year, then the income shall be computed on the basis of the period for which separate return is made.

Sec. 47. (c) Income placed on annual basis.

was

made and the date designated as made and the date designated as
the close of the fiscal year. If the the close of the fiscal year. If the
change is from one fiscal year to change is from one fiscal year to
another fiscal year a separate re- another fiscal year a separate re-
turn shall be made for the period turn shall be made for the period
between the close of the former fis-between the close of the former fis-
cal year and the date designated as
the close of the new fiscal year.

cal year and the date designated as the close of the new fiscal year.

Sec. 47. (b) Income computed on Sec. 47. (b) Income computed on basis of short period.-Where a basis of short period.-Where a separate return is made under sub- separate return is made under subsection (a) on account of a change section (a) on account of a change in the accounting period, and in all in the accounting period, and in all other cases where a separate return other cases where a separate return is required or permitted, by regula-is required or permitted, by regulations prescribed by the Commis- tions prescribed by the Commissioner with the approval of the Sec- sioner with the approval of the Secretary, to be made for a fractional retary, to be made for a fractional part of a year, then the income shall part of a year, then the income shall be computed on the basis of the be computed on the basis of the period for which separate return is period for which separate return is

made.

Sec. 47. (c) Income placed on annual basis.

Sec. 47. (c) (1) General rule.- Sec. 47. (c) (1) General rule.If a separate return is made under If a separate return is made fexsubsection (a) on account of a eept returns of the income of change in the accounting period, eorporation under subsection (a) the net income, computed on the on account of a change in the acbasis of the period for which counting period, the net income, separate return is made (referred computed on the basis of the period to in this subsection as the "short for which separate return is made period") shall be placed on an an- (referred to in this subsection as nual basis by multiplying the the "short period") shall be placed amount thereof by twelve, and on an annual basis by multiplying dividing by the number of months the amount thereof by twelve, and in the short period. The tax shall dividing by the number of months be such part of the tax computed included in the period for which the

made.

Sec. 47. (c) Income placed on annual basis.-If a separate return is made (except returns of the income of a corporation) under subsection (a) on account of a change in the accounting period, the net income, computed on the basis of the period for which separate return is made, shall be placed on an annual basis by multiplying the amount thereof by twelve and dividing by the number of months included in the period for which the separate return is made. The tax shall be such part of the tax computed on such annual basis as the

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See p. 94, Eighth Edition.

Sec. 47. (a) Returns for short Sec. 47. (a) Returns for short Sec. 47. (a) Returns for short period resulting from change of period resulting from change of period resulting from change of accounting period. If a taxpayer, accounting period. If a taxpayer, accounting period. with the approval of the Commis- with the approval of the Commissioner, changes the basis of com- sioner, changes the basis of computputing net income from fiscal year ing net income from fiscal year to to calendar year a separate return calendar year a separate return shall shall be made for the period be- be made for the period between the tween the close of the last fiscal close of the last fiscal year for year for which return was made which return was made and the foland the following December 31. lowing December 31. If the change If the change is from calendar is from calendar year to fiscal year, year to fiscal year, a separate re- a separate return shall be made for turn shall be made for the period the period between the close of the between the close of the last calen- last calendar year for which return dar year for which return was was made and the date designated made and the date designated as as the close of the fiscal year. If the close of the fiscal year. If the the change is from one fiscal year change is from one fiscal year to to another fiscal year a separate reanother fiscal year a separate re- turn shall be made for the period turn shall be made for the period between the close of the former fisbetween the close of the former fiscal year and the date designated as cal year and the date designated as the close of the new fiscal year. the close of the new fiscal year.

Sec. 47. (b) Income computed on

Sec. 47. (b) Income computed on basis of short period. Where a basis of short period.-Where a separate return is made under sub- separate return is made under subsection (a) on account of a change section (a) on account of a change in the accounting period, and in all in the accounting period, and in all other cases where a separate return other cases where a separate return is required or permitted, by regula- is required or permitted, by regulations prescribed by the Commis- tions prescribed by the Commissioner with the approval of the Sec- sioner with the approval of the Secretary, to be made for a fractional retary, to be made for a fractional part of a year, then the income shall part of a year, then the income shall be computed on the basis of the be computed on the basis of the period for which separate return is period for which separate return is made. made.

Sec. 47. (c) Income placed on Sec. 47. (c) Income placed on annual basis. If a separate re- annual basis. If a separate return is made (except returns of the turn is made (except returns of the income of a corporation) under income of a corporation) under subsection (a) on account of a subsection (a) on account of a change in the accounting period, the change in the accounting period, the net income, computed on the basis net income, computed on the basis of the period for which separate re- of the period for which separate return is made, shall be placed on an turn is made, shall be placed on an annual basis by multiplying the annual basis by multiplying the amount thereof by twelve and di- amount thereof by twelve and dividing by the number of months in-viding by the number of months included in the period for which the cluded in the period for which the separate return is made. The tax separate return is made. The tax shall be such part of the tax com- shall be such part of the tax computed on such annual basis as the puted on such annual basis as the

Sec. 47. (b) Income computed on basis of short period.

See p. 94, Eighth Edition.

Sec. 47. (c) Income placed on annual basis.

See p. 94, Eighth Edition.

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