SEC. 2. TREATMENT OF CERTAIN LIQUIDATIONS OF NEW 
MOTOR VEHICLE INVENTORY AS QUALIFIED 
LIQUIDATIONS OF LIFO INVENTORY. 
(a) IN GENERAL.—In the case of any dealer of new 
motor vehicles which inventories new motor vehicles under 
the LIFO method for any specified taxable year, the re-
quirements of paragraphs (1)(B) and (2) of section 473(c) 
of the Internal Revenue Code of 1986 shall be treated as 
satisfied with respect to such inventory for such taxable 
year. 
(b) ADDITIONAL RELIEF.— 
(1) IN
GENERAL.—The Secretary shall, not 
later than the date which is 90 days after the date 
of the enactment of this Act, prescribe regulations or 
other guidance under which dealers of new motor ve-
hicles with a qualified liquidation (determined after 
application of subsection (a)) of new motor vehicles 
for any specified taxable year may elect— 
(A) to not recognize any income in the 
specified taxable year which is solely attrib-
utable to such qualified liquidation, and 
(B) to treat the replacement period with 
respect to such liquidation as being the period 
beginning with the first taxable year after such 
specified taxable year and ending with the ear-
lier of— 
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(i) the first taxable year after such 
liquidation with respect to which such deal-
er does not inventory new motor vehicles 
under the LIFO method, or 
(ii) the last taxable year ending before 
January 1, 2026. 
(2) FAILURE TO FULLY REPLACE LIQUIDATED 
VEHICLES DURING REPLACEMENT PERIOD.—If, as of 
the close of the replacement period, the taxpayer has 
failed to replace all liquidated vehicles with respect 
to a qualified liquidation to which paragraph (1) ap-
plies, the taxpayer shall increase gross income for 
the last taxable year of the replacement period by 
the sum of— 
(A) the aggregate amount of income that 
would have been required to be recognized in 
the liquidation year had the taxpayer elected to 
apply the provisions of section 473 of the Inter-
nal Revenue Code of 1986 and not made the 
election in paragraph (1), plus 
(B) interest thereon at the underpayment 
rate established under section 6621 of such 
Code. 
(3) ELECTIONS.— 
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(A) IN GENERAL.—Except to the extent 
provided in subparagraph (B), an election 
under paragraph (1) with respect to any speci-
fied taxable year shall be made by the due date 
(including extensions) for filing the taxpayer’s 
return of tax for such taxable year and in such 
manner as the Secretary may prescribe. Once 
made, any such election shall be irrevocable. 
(B) CERTAIN
ELECTIONS
TREATED
AS 
CHANGE IN METHOD OF ACCOUNTING.—In the 
case of an election with respect to a specified 
taxable year for which the return of tax has al-
ready been filed before the date of the enact-
ment of this Act, any election under paragraph 
(1) for such specified taxable year may be made 
on the return of tax for the first taxable year 
ending after the date of the enactment of this 
Act and shall be treated for purposes of section 
481 of the Internal Revenue Code of 1986 as 
a change in method of accounting initiated by 
the taxpayer and made with the consent of the 
Secretary. 
(c) DEFINITIONS.—For purposes of this section— 
(1) SPECIFIED
TAXABLE
YEAR.—The term 
‘‘specified taxable year’’ means any liquidation year 
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ending after March 12, 2020, and before January 1, 
2022. 
(2) NEW
MOTOR
VEHICLE.—The term ‘‘new 
motor vehicle’’ means a motor vehicle— 
(A) 
which 
is 
described 
in 
section 
163(j)(9)(C)(i) of the Internal Revenue Code of 
1986, and 
(B) the original use of which has not com-
menced. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury or the Secretary’s del-
egate. 
(4) OTHER TERMS.—Except as otherwise pro-
vided in this section, terms used in this section 
which are also used in section 473 of the Internal 
Revenue Code of 1986 shall have the same meaning 
as when used in such section 473. 
Æ 
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