Source: http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section451&num=0&edition=prelim
Timestamp: 2019-04-25 21:44:04+00:00

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The amount of any item of gross income shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under the method of accounting used in computing taxable income, such amount is to be properly accounted for as of a different period.
(ii) any item of gross income in connection with a mortgage servicing contract.
For purposes of this section, the all events test is met with respect to any item of gross income if all the events have occurred which fix the right to receive such income and the amount of such income can be determined with reasonable accuracy.
Paragraph (1) shall not apply with respect to any item of gross income for which the taxpayer uses a special method of accounting provided under any other provision of this chapter, other than any provision of part V of subchapter P (except as provided in clause (ii) of paragraph (1)(B)).
For purposes of this subsection, in the case of a contract which contains multiple performance obligations, the allocation of the transaction price to each performance obligation shall be equal to the amount allocated to each performance obligation for purposes of including such item in revenue in the applicable financial statement of the taxpayer.
For purposes of paragraph (1), if the financial results of a taxpayer are reported on the applicable financial statement (as defined in paragraph (3)) for a group of entities, such statement shall be treated as the applicable financial statement of the taxpayer.
(ii) 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.
Except as otherwise provided by the Secretary, the election under paragraph (1)(B) shall not apply with respect to advance payments received by the taxpayer during a taxable year if such taxpayer ceases to exist during (or with the close of) such taxable year.
(iii) which is for goods, services, or such other items as may be identified by the Secretary for purposes of this clause.
(vii) any other payment identified by the Secretary for purposes of this subparagraph.
For purposes of this subsection, an item of gross income is received by the taxpayer if it is actually or constructively received, or if it is due and payable to the taxpayer.
For purposes of this subsection, rules similar to subsection (b)(4) shall apply.
In the case of the death of a taxpayer whose taxable income is computed under an accrual method of accounting, any amount accrued only by reason of the death of the taxpayer shall not be included in computing taxable income for the period in which falls the date of the taxpayer's death.
For purposes of subsection (a), tips included in a written statement furnished an employer by an employee pursuant to section 6053(a) shall be deemed to be received at the time the written statement including such tips is furnished to the employer.
In the case of insurance proceeds received as a result of destruction or damage to crops, a taxpayer reporting on the cash receipts and disbursements method of accounting may elect to include such proceeds in income for the taxable year following the taxable year of destruction or damage, if he establishes that, under his practice, income from such crops would have been reported in a following taxable year. For purposes of the preceding sentence, payments received under the Agricultural Act of 1949, as amended, or title II of the Disaster Assistance Act of 1988, as a result of (1) destruction or damage to crops caused by drought, flood, or any other natural disaster, or (2) the inability to plant crops because of such a natural disaster shall be treated as insurance proceeds received as a result of destruction or damage to crops. An election under this subsection for any taxable year shall be made at such time and in such manner as the Secretary prescribes.
In the case of income derived from the sale or exchange of livestock in excess of the number the taxpayer would sell if he followed his usual business practices, a taxpayer reporting on the cash receipts and disbursements method of accounting may elect to include such income for the taxable year following the taxable year in which such sale or exchange occurs if he establishes that, under his usual business practices, the sale or exchange would not have occurred in the taxable year in which it occurred if it were not for drought, flood, or other weather-related conditions, and that such conditions had resulted in the area being designated as eligible for assistance by the Federal Government.
Paragraph (1) shall apply only to a taxpayer whose principal trade or business is farming (within the meaning of section 6420(c)(3)).
If section 1033(e)(2) applies to a sale or exchange of livestock described in paragraph (1), the election under paragraph (1) shall be deemed valid if made during the replacement period described in such section.
In the case of a taxpayer the taxable income of which is computed under an accrual method of accounting, any income attributable to the sale or furnishing of utility services to customers shall be included in gross income not later than the taxable year in which such services are provided to such customers.
(iv) the transporting of gas or steam by pipeline.
(ii) the period in which the taxpayer bills (or may bill) the customers for such service.
(B) the amount of such deposit which is withdrawable as of the close of the taxable year (determined without regard to any penalty for premature withdrawals of a time deposit).
Any interest not included in gross income by reason of paragraph (1) shall be treated as credited in the next calendar year.
No deduction shall be allowed to any qualified financial institution for interest not includible in gross income under paragraph (1) until such interest is includible in gross income.
(B) any requirement imposed by the State in which such institution is located by reason of the bankruptcy or insolvency (or threat thereof) of 1 or more financial institutions in the State.
For purposes of this subsection, the terms "qualified individual", "qualified financial institution", and "deposit" have the same respective meanings as when used in section 165(l).
For purposes of this title, in the case of an individual on the cash receipts and disbursements method of accounting, a qualified prize option shall be disregarded in determining the taxable year for which any portion of the qualified prize is properly includible in gross income of the taxpayer.
(ii) is exercisable not later than 60 days after such individual becomes entitled to the qualified prize.
(iii) is payable over a period of at least 10 years.
The Secretary shall provide for the application of this subsection in the case of a partnership or other pass-through entity consisting entirely of individuals described in paragraph (1).
(B) ratably over the 8-taxable year period beginning with the taxable year which includes the date of such transaction, in the case of any such gain not recognized under subparagraph (A).
(B) any income derived from such transaction in excess of the amount described in subparagraph (A) which is required to be included in gross income for such taxable year (determined without regard to this subsection).
but only if such sale or disposition is to an independent transmission company.
(ii) a political subdivision or affiliate thereof whose transmission facilities are under the operational control of a person described in clause (i).
Acquisition of control of a corporation shall be taken into account under this subsection with respect to a qualifying electric transmission transaction only if the principal trade or business of such corporation is a trade or business referred to in subparagraph (A).
The term "exempt utility property" shall not include any property which is located outside the United States.
(B) an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22))).
In the case of a corporation which is a member of an affiliated group filing a consolidated return, any exempt utility property purchased by another member of such group shall be treated as purchased by such corporation for purposes of applying paragraph (1)(A).
(B) such deficiency may be assessed before the expiration of such 3-year period notwithstanding any law or rule of law which would otherwise prevent such assessment.
For purposes of this subsection, the taxpayer shall be considered to have purchased any property if the unadjusted basis of such property is its cost within the meaning of section 1012.
An election under paragraph (1) shall be made at such time and in such manner as the Secretary may require and, once made, shall be irrevocable.
Section 453 shall not apply to any qualifying electric transmission transaction with respect to which an election to apply this subsection is made.
The Agricultural Act of 1949, as amended, referred to in subsec. (f), is act Oct. 31, 1949, ch. 792, 63 Stat. 1051 , as amended, which is classified principally to chapter 35A (§1421 et seq.) of Title 7, Agriculture. For complete classification of this Act to the Code, see Short Title note set out under section 1421 of Title 7 and Tables.
The Disaster Assistance Act of 1988, referred to in subsec. (f), is Pub. L. 100–387, Aug. 11, 1988, 102 Stat. 924 . Title II of the Disaster Assistance Act of 1988 is set out as a note under section 1421 of Title 7. For complete classification of this Act to the Code, see Tables.
2018-Subsec. (k)(3). Pub. L. 115–123 substituted "January 1, 2018" for "January 1, 2017" in introductory provisions.
2017-Subsecs. (b) to (k). Pub. L. 115–97 first added subsec. (b) and then added subsec. (c) and correspondingly redesignated former subsecs. (b) to (i) first as (c) to (j) and then as (d) to (k), respectively.
2015-Subsec. (i)(3). Pub. L. 114–113 substituted "January 1, 2017" for "January 1, 2015" in introductory provisions.
2014-Subsec. (i)(3). Pub. L. 113–295 substituted "January 1, 2015" for "January 1, 2014" in introductory provisions.
2013-Subsec. (i)(3). Pub. L. 112–240 substituted "January 1, 2014" for "January 1, 2012" in introductory provisions.
2010-Subsec. (i)(3). Pub. L. 111–312 substituted "January 1, 2012" for "January 1, 2010" in introductory provisions.
2008-Subsec. (i)(3). Pub. L. 110–343, §109(a)(1), inserted "(before January 1, 2010, in the case of a qualified electric utility)" after "January 1, 2008" in introductory provisions.
Subsec. (i)(4)(B)(ii). Pub. L. 110–343, §109(b), substituted "the date which is 4 years after the close of the taxable year in which the transaction occurs" for "December 31, 2007".
Subsec. (i)(5)(C). Pub. L. 110–343, §109(c), added subpar. (C).
Subsec. (i)(6) to (11). Pub. L. 110–343, §109(a)(2), added par. (6) and redesignated former pars. (6) to (10) as (7) to (11), respectively.
2005-Subsec. (i)(3). Pub. L. 109–58, §1305(a), substituted "2008" for "2007" in introductory provisions.
Subsec. (i)(4)(B)(ii). Pub. L. 109–58, §1305(b), substituted "December 31, 2007" for "the close of the period applicable under subsection (a)(2)(B) as extended under paragraph (2)".
2004-Subsec. (e)(3). Pub. L. 108–357, §311(c), added par. (3).
Subsec. (i). Pub. L. 108–357, §909(a), added subsec. (i).
1998-Subsec. (h). Pub. L. 105–277 added subsec. (h).
1997-Subsec. (e). Pub. L. 105–34 inserted ", flood, or other weather-related conditions" after "drought" in heading and substituted "drought, flood, or other weather-related conditions, and that such conditions" for "drought conditions, and that these drought conditions" in par. (1).
1988-Subsec. (d). Pub. L. 100–647, §6033(a), inserted "or title II of the Disaster Assistance Act of 1988," after "the Agricultural Act of 1949, as amended,".
Subsec. (e)(1). Pub. L. 100–647, §6030(a), struck out "(other than livestock described in section 1231(b)(3))" after "exchange of livestock".
Subsecs. (f), (g). Pub. L. 100–647, §1009(d)(3), redesignated subsec. (f), relating to treatment of interest on frozen deposits in certain financial institutions, as (g).
1986-Subsec. (f). Pub. L. 99–514, §905(b), added subsec. (f) relating to treatment of interest on frozen deposits in certain financial institutions.
Pub. L. 99–514, §821(a), added subsec. (f) relating to special rule for utility services.
1976-Subsec. (d). Pub. L. 94–455, §§1906(b)(13)(A), 2102(a), (b), inserted reference to disaster payments in heading, provided that payments received under the Agricultural Act of 1949, as amended, be treated as insurance proceeds received as a result of destruction or damage to crops if the payments are received as the result of destruction or damage from drought, flood, or other natural disaster, or as the result of inability to plant crops because of drought, flood, or other natural disaster, and struck out "or his delegate" after "Secretary".
Subsec. (e). Pub. L. 94–455, §2141(a), added subsec. (e).
1969-Subsec. (d). Pub. L. 91–172 added subsec. (d).
1965-Subsec. (c). Pub. L. 89–97 added subsec. (c).
Pub. L. 115–123, div. D, title I, §40414(b), Feb. 9, 2018, 132 Stat. 152 , provided that: "The amendment made by this section [amending this section] shall apply to dispositions after December 31, 2016."
"(c) Effective Date.-The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 2017.
"(B) such change shall be treated as made with the consent of the Secretary of the Treasury.
"(B) was prohibited under the Internal Revenue Code of 1986 prior to such amendments and is permitted under such Code after such amendments.
"(2) the period for taking into account any adjustments under section 481 by reason of a qualified change in method of accounting (as defined in subsection (d)) shall be 6 years."
Pub. L. 114–113, div. Q, title I, §191(b), Dec. 18, 2015, 129 Stat. 3075 , provided that: "The amendment made by this section [amending this section] shall apply to dispositions after December 31, 2014."
Pub. L. 113–295, div. A, title I, §159(b), Dec. 19, 2014, 128 Stat. 4022 , provided that: "The amendment made by this section [amending this section] shall apply to dispositions after December 31, 2013."
Pub. L. 112–240, title IV, §411(b), Jan. 2, 2013, 126 Stat. 2343 , provided that: "The amendment made by this section [amending this section] shall apply to dispositions after December 31, 2011."
"(1) In general.-The amendment made by subsection (a) [amending this section] shall apply to transactions occurring after the date of the enactment of this Act [Aug. 8, 2005].
"(2) Technical amendment.-The amendment made by subsection (b) [amending this section] shall take effect as if included in the amendments made by section 909 of the American Jobs Creation Act of 2004 [Pub. L. 108–357, amending this section]."
Pub. L. 111–312, title VII, §705(b), Dec. 17, 2010, 124 Stat. 3311 , provided that: "The amendment made by this section [amending this section] shall apply to dispositions after December 31, 2009."
"(1) Extension.-The amendments made by subsection (a) [amending this section] shall apply to transactions after December 31, 2007.
"(2) Transfers of operational control.-The amendment made by subsection (b) [amending this section] shall take effect as if included in section 909 of the American Jobs Creation Act of 2004 [Pub. L. 108–357].
"(3) Exception for property located outside the united states.-The amendment made by subsection (c) [amending this section] shall apply to transactions after the date of the enactment of this Act [Oct. 3, 2008]."
Pub. L. 108–357, title III, §311(d), Oct. 22, 2004, 118 Stat. 1467 , provided that: "The amendments made by this section [amending this section and section 1033 of this title] shall apply to any taxable year with respect to which the due date (without regard to extensions) for the return is after December 31, 2002."
Pub. L. 108–357, title VIII, §909(b), Oct. 22, 2004, 118 Stat. 1659 , provided that: "The amendments made by this section [amending this section] shall apply to transactions occurring after the date of the enactment of this Act [Oct. 22, 2004], in taxable years ending after such date."
"(1) In general.-The amendment made by this section [amending this section] shall apply to any prize to which a person first becomes entitled after the date of enactment of this Act [Oct. 21, 1998].
"(B) such option shall be treated as a qualified prize option if it is exercisable only during all or part of the 18-month period beginning on July 1, 1999."
Pub. L. 105–34, title IX, §913(c), Aug. 5, 1997, 111 Stat. 878 , provided that: "The amendments made by this section [amending this section and section 1033 of this title] shall apply to sales and exchanges after December 31, 1996."
Amendment by section 1009(d)(3) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.
Pub. L. 100–647, title VI, §6030(b), Nov. 10, 1988, 102 Stat. 3694 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to sales or exchanges occurring after December 31, 1987."
Pub. L. 100–647, title VI, §6033(b), Nov. 10, 1988, 102 Stat. 3695 , as amended by Pub. L. 101–239, title VII, §7816(g), Dec. 19, 1989, 103 Stat. 2421 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to payments received before, on, or after the date of enactment of this Act [Nov. 10, 1988]."
"(1) In general.-The amendments made by this section [amending this section] shall apply to taxable years beginning after December 31, 1986.
"(C) the adjustments under section 481 of the Internal Revenue Code of 1954 [now 1986] by reason of such change shall be taken into account ratably over a period no longer than the first 4 taxable years beginning after December 31, 1986.
"(3) Special rule for certain cycle billing.-If a taxpayer for any taxable year beginning before August 16, 1986, for purposes of chapter 1 of the Internal Revenue Code of 1986 took into account income from services described in section 451(f) [now 451(h)] of such Code (as added by subsection (a)) on the basis of the period in which the customers' meters were read, then such treatment for such year shall be deemed to be proper. The preceding sentence shall also apply to any taxable year beginning after August 16, 1986, and before January 1, 1987, if the taxpayer treated such income in the same manner for the taxable year preceding such taxable year."
"(1) In general.-The amendment made by subsection (a) [amending section 165 of this title] shall apply to taxable years beginning after December 31, 1981, and, except as provided in paragraph (2), the amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after December 31, 1982.
"(A) The amendment made by subsection (b) [amending this section] shall apply to taxable years beginning after December 31, 1982, and before January 1, 1987, only if the qualified individual elects to have such amendment apply for all such taxable years.
"(B) In the case of interest attributable to the period beginning January 1, 1983, and ending December 31, 1987, the interest deduction of financial institutions shall be determined without regard to paragraph (3) of section 451(f) [now 451(h)] of the Internal Revenue Code of 1986 (as added by subsection (b))."
Pub. L. 94–455, title XXI, §2102(c), Oct. 4, 1976, 90 Stat. 1900 , provided that: "The amendments made by this section [amending this section] shall apply to payments received after December 31, 1973, in taxable years ending after such date."
Pub. L. 94–455, title XXI, §2141(b), Oct. 4, 1976, 90 Stat. 1933 , provided that: "The amendment made by this section [amending this section] applies to taxable years beginning after December 31, 1975."
Pub. L. 91–172, title II, §215(b), Dec. 30, 1969, 83 Stat. 573 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [Dec. 30, 1969]."
Voluntary separation incentives paid to members of Armed Forces under 10 U.S.C. 1175 as includable in gross income only for taxable year in which incentive is paid, see section 662(b) of Pub. L. 102–190, set out as a note under section 1175 of Title 10, Armed Forces.
For provisions relating to credit or refund of overpayments of tax, and assessment of underpayments of tax, due to amendments by section 905 of Pub. L. 99–514 or section 1009(d) of Pub. L. 100–647, see section 1009(d)(4) of Pub. L. 100–647, set out as a note under section 165 of this title.
"(3) properly allocate all costs which directly benefit, or are incurred by reason of, the extended period long-term contract activities of the taxpayer.
"(1) In general.-The term 'extended period long-term contract' means any long-term contract which the taxpayer estimates (at the time such contract is entered into) will not be completed within the 2-year period beginning on the contract commencement date of such contract.
"(ii) whose average annual gross receipts over the 3 taxable years preceding the taxable year in which such contract is entered into do not exceed $25,000,000.
for the 3 taxable years of such persons preceding the taxable year in which the contract described in subparagraph (A) is entered into shall be included in the gross receipts of the taxpayer for the period described in subparagraph (A). The Secretary shall prescribe regulations which provide attribution rules that take into account, in addition to the persons and entities described in the preceding sentence, taxpayers who engage in construction contracts through partnerships, joint ventures, and corporations.
"(ii) the determination shall be made without regard to subsections (a)(4) and (e)(3)(C) of section 1563.
"(3) Construction contract.-The term 'construction contract' means any contract for the building, construction, reconstruction, or rehabilitation of, or the installation of any integral component to, improvements to real property.
"(4) Contract commencement date.-The term 'contract commencement date' means, with respect to any contract, the first date on which any costs (other than costs such as bidding expenses or expenses incurred in connection with negotiating the contract) allocable to such contract are incurred.
"(1) In general.-The modifications to regulations which are required to be made under paragraphs (1) and (2) of subsection (a) shall apply with respect to taxable years ending after December 31, 1982.
"(A) In general.-Any modification to Income Tax Regulation 1.451–3 made under subsection (a)(3) which requires additional costs to be allocated to a contract shall apply only to the applicable percentage of such additional costs incurred in taxable years beginning after December 31, 1982, with respect to contracts entered into after such date.
"(A) Time of completion.-Any contract of a taxpayer which would (but for this paragraph) be treated as having been completed prior to the first taxable year of such taxpayer ending after December 31, 1982, solely by reason of any modification to regulations made under subsection (a)(1), shall be treated as having been completed on the first day of such taxable year.
shall be treated as having been completed on the first day after December 31, 1982, on which any contract which was severed from such contract (by reason of the modifications made by subsection (a)(2)) is completed (determined after the application of any modifications to regulations made under subsection (a)(1)).
"(4) Underpayments of estimated tax for 1982.-To the extent provided in regulations, no addition to tax shall be made under section 6654 or 6655 of the Internal Revenue Code of 1954 for the taxpayer's first taxable year ending after December 31, 1982, by reason of a long-term contract, but only with respect to installments required to be paid before April 13, 1983."
"(a) General Rule.-The taxable year of inclusion in gross income of any amount covered by a private deferred compensation plan shall be determined in accordance with the principles set forth in regulations, rulings, and judicial decisions relating to deferred compensation which were in effect on February 1, 1978.
"(B) under which the payment or otherwise making available of compensation is deferred.
"(E) that portion of any plan which consists of a trust to which section 402(b) of such Code applies.
"(c) Effective Date.-This section shall apply to taxable years ending on or after February 1, 1978."
then the taxpayer may elect to include such proceeds in income for his last taxable year beginning in 1977.
"(b) Making and Effect of Election-An election under this section for any taxable year shall be made at such time and in such manner as the Secretary of the Treasury may by regulations prescribe and shall apply with respect to all proceeds described in subsection (a) which were received by the taxpayer."

References: §109
 §109
 §109
 §109
 §1305
 §1305
 §311
 §909
 §6033
 §6030
 §1009
 §905
 §821
 §2141
 §40414
 §191
 §159
 §411
 §705
 §311
 §909
 §913
 §6030
 §6033
 §7816
 §2102
 §2141
 §215