Sec. 3303. Certain special rules for taxable year of inclusion

763 words·~3 min read·/bill/113/hr/1/ih/section-3303

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Section 451 is amended by redesignating subsections

(b)through

(j)as subsection

(c)through (k), respectively, and by inserting after subsection

(a)the following new subsection: In the case of a taxpayer the taxable income of which is computed under the accrual method of accounting, the amount of any portion of any item of income shall be included in gross income not later than the taxable year with respect to which such amount is taken into account as income in— an audited financial statement of the taxpayer described in section 1221(b)(3)(B), or such other financial statement as the Secretary may specify for purposes of this subsection. Paragraph

(1)shall not apply with respect to any item of income to which section 460 applies. . Section 451, as amended by subsection (a), is amended by redesignating subsections

(c)through

(k)as subsections

(d)through (l), respectively, and by inserting after subsection

(b)the following new subsection: A taxpayer which computes taxable income under the accrual method of accounting, and receives any advance payment during the taxable year, shall— except as provided in subparagraph (B), include such advance payment in gross income for such taxable year, or if the taxpayer elects the application of this subparagraph with respect to the category of advance payments to which such advance payment belongs, the taxpayer shall— to the extent that any portion of such advance payment is required under subsection

(b)to be included in gross income in the taxable year in which such payment is received, so include such portion, and include the remaining portion of such advance payment in gross income in the taxable year following the taxable year in which such payment is received. Except as otherwise provided in this paragraph, the election under paragraph (1)(B) shall be made at such time, in such form and manner, and with respect to such categories of advance payments, as the Secretary may provide. An election under paragraph (1)(B) shall be effective for the taxable year with respect to which it is first made and for all subsequent taxable years, unless the taxpayer secures the consent of the Secretary to revoke such election. For purposes of this title, the computation of taxable income under an election made under paragraph (1)(B) shall be treated as a method of accounting. For purposes of this subsection— The term advance payment means any payment— the full inclusion of which in the gross income of the taxpayer for the taxable year of receipt is a permissible method of accounting under this section (determined without regard to this subsection), and which is for goods, services, or such other items as may be identified by the Secretary for purposes of this clause. Except as otherwise provided by the Secretary, such term shall not include— rent, insurance premiums, payments with respect to financial instruments, payments with respect to warranty or guarantee contracts under which a third party is the primary obligor, payments subject to section 871(a), 881, 1441, or 1442, payments in property to which section 83 applies, and any other payment identified by the Secretary for purposes of this subparagraph. . Section 451, as amended by subsections

(a)and (b), is amended by striking subsection (f). Section 451, as amended by subsections

(a)and (b), is amended by striking subsection (g). Section 451, as amended by subsections

(a)and (b), is amended by striking subsection (k). Section 451, as amended by subsections (a), (b), (c), (d), and (e), is amended by redesignating subsections (h), (i), (j), and

(l)as subsections (f), (g), (h), and (i), respectively. Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2014. — Except as provided in subparagraph (B), the amendments made by subsection

(c)shall apply to destruction and damage of crops occurring after December 31, 2014. In the case of inability to plant crops because of a natural disaster, the amendments made by subsection

(c)shall apply to natural disasters occurring after December 31, 2014. The amendments made by subsection

(d)shall apply to sales and exchanges after December 31, 2014. The amendments made by subsection

(e)shall apply to sales and dispositions after December 31, 2013. In the case of any taxpayer required by the amendments made by subsections

(a)and

(b)to change its method of accounting for its first taxable year beginning after December 31, 2014— such change shall be treated as initiated by the taxpayer, and such change shall be treated as made with the consent of the Secretary of the Treasury.