Source: https://www.law.cornell.edu/uscode/text/26/448
Timestamp: 2019-01-23 09:18:49
Document Index: 635374742

Matched Legal Cases: ['§ 448', '§ 448', '§\u202f801', '§\u202f1008', '§\u202f6032', '§\u202f403', '§\u202f13102', '§\u202f13102', '§\u202f13102', '§\u202f13102', '§\u202f13102', '§\u202f1008', '§\u202f6032', '§\u202f1008', '§\u202f1008', '§\u202f1008', '§\u202f1008', '§\u202f1008', '§\u202f403', '§\u202f6032', '§\u202f801', '§\u202f1008']

26 U.S. Code § 448 - Limitation on use of cash method of accounting | U.S. Code | US Law | LII / Legal Information Institute
Section 448. Limitation on use of cash method of accounting
26 U.S. Code § 448 - Limitation on use of cash method of accounting
(a) General ruleExcept as otherwise provided in this section, in the case of a—
(c) Gross receipts testFor purposes of this section—
(3) Special rulesFor purposes of this subsection—
(4) Adjustment for inflationIn the case of any taxable year beginning after December 31, 2018, the dollar amount in paragraph (1) shall be increased by an amount equal to—
(2) Qualified personal service corporationThe term “qualified personal service corporation” means any corporation—
(4) Special rules for application of paragraph (2)For purposes of paragraph (2)—
(A) In generalIn the case of any person using an accrual method of accounting with respect to amounts to be received for the performance of services by such person, such person shall not be required to accrue any portion of such amounts which (on the basis of such person’s experience) will not be collected if—
(Added Pub. L. 99–514, title VIII, § 801(a), Oct. 22, 1986, 100 Stat. 2345; amended Pub. L. 100–647, title I, § 1008(a)(1), (2), (7)–(9), title VI, § 6032(a), Nov. 10, 1988, 102 Stat. 3436, 3437, 3695; Pub. L. 107–147, title IV, § 403(a), Mar. 9, 2002, 116 Stat. 40; Pub. L. 115–97, title I, § 13102(a)(1)–(4), Dec. 22, 2017, 131 Stat. 2102.)
2017—Subsec. (b)(3). Pub. L. 115–97, § 13102(a)(2), amended par. (3) generally. Prior to amendment, text read as follows: “Paragraphs (1) and (2) of subsection (a) shall not apply to any corporation or partnership for any taxable year if, for all prior taxable years beginning after December 31, 1985, such entity (or any predecessor) met the $5,000,000 gross receipts test of subsection (c).”
Subsec. (c). Pub. L. 115–97, § 13102(a)(1), substituted “Gross receipts test” for “$5,000,000 gross receipts test” in heading and amended introductory provisions and par. (1) generally. Prior to amendment, text read as follows: “For purposes of this section—
“(1) In general.—A corporation or partnership meets the $5,000,000 gross receipts test of this subsection for any prior taxable year if the average annual gross receipts of such entity for the 3-taxable-year period ending with such prior taxable year does not exceed $5,000,000.”
Subsec. (c)(4). Pub. L. 115–97, § 13102(a)(3), added par. (4).
Subsec. (d)(7). Pub. L. 115–97, § 13102(a)(4), amended par. (7) generally. Prior to amendment, par. (7) related to coordination with section 481.
1988—Subsec. (c)(3)(D). Pub. L. 100–647, § 1008(a)(9), added subpar. (D).
Subsec. (d)(2). Pub. L. 100–647, § 6032(a), inserted at end “To the extent provided in regulations which shall be prescribed by the Secretary, indirect holdings through a trust shall be taken into account under subparagraph (B).”
Subsec. (d)(2)(B). Pub. L. 100–647, § 1008(a)(1)(A), substituted “(or indirectly through 1 or more partnerships, S corporations, or qualified personal service corporations not described in paragraph (2) or (3) of subsection (a))” for “or indirectly”.
Subsec. (d)(3). Pub. L. 100–647, § 1008(a)(7), inserted sentence at end relating to treatment of S corporation as tax shelter.
Subsec. (d)(4)(C). Pub. L. 100–647, § 1008(a)(8), substituted “90 percent or more of” for “substantially all of”.
Pub. L. 100–647, § 1008(a)(2), substituted “such group” for “all such members”.
Subsec. (d)(8). Pub. L. 100–647, § 1008(a)(1)(B), added par. (8).
Pub. L. 107–147, title IV, § 403(b), Mar. 9, 2002, 116 Stat. 41, provided that:
The amendments made by this section [amending this section] shall apply to taxable years ending after the date of the enactment of this Act [Mar. 9, 2002].
“(2)Change in method of accounting.—In the case of any taxpayer required by the amendments made by this section to change its method of accounting for its first taxable year ending after the date of the enactment of this Act—
the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period of 4 years (or if less, the number of taxable years that the taxpayer used the method permitted under section 448(d)(5) of such Code as in effect before the date of the enactment of this Act) beginning with such first taxable year.”
Pub. L. 100–647, title VI, § 6032(b), Nov. 10, 1988, 102 Stat. 3695, provided that:
“The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1986.”
Pub. L. 99–514, title VIII, § 801(d), Oct. 22, 1986, 100 Stat. 2348, as amended by Pub. L. 100–647, title I, § 1008(a)(5), (6), Nov. 10, 1988, 102 Stat. 3437, provided that:
Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending section 461 of this title] shall apply to taxable years beginning after December 31, 1986.
“(2)Election to retain method for certain transactions.—
A taxpayer may elect not to have the amendments made by this section apply to any loan or lease, or any transaction with a related party (within the meaning of section 267(b) of the Internal Revenue Code of 1954, as in effect before the enactment of this Act), entered into on or before September 25, 1985. Any election under the preceding sentence may be made separately with respect to each transaction.
“(3)Certain contracts.—The amendments made by this section shall not apply to—
contracts for the acquisition or transfer of real property, and
contracts for services related to the acquisition or development of real property,
“(4)Treatment of providing engineering services.—Each member of an affiliated group of corporations (within the meaning of section 1504(a) of the Internal Revenue Code of 1986) shall be allowed to use the cash receipts and disbursements method of accounting for any trade or business of providing engineering services with respect to taxable years ending after December 31, 1986, if the common parent of such group—
was incorporated in the State of Delaware in 1970,
was the successor to a corporation that was incorporated in the State of Illinois in 1949, and
used a method of accounting for long-term contracts of accounting [sic] for a substantial part of its income from the performance of engineering services.
“(5)Special rule for paragraphs (2) and (3).—
If any loan, lease, contract, or evidence of any transaction to which paragraph (2) or (3) applies is transferred after June 10, 1987, to a person other than a related party (within the meaning of paragraph (2)), paragraph (2) or (3) shall cease to apply on and after the date of such transfer.”