Page 49 - Tax Reforms - Businesses

Taxable Year of Income Inclusion under an

Accrual Method of Accounting (3/5)

1 Changes in SECTION 451 (b) NPRM
Accounting
This notice of proposed rulemaking provides guidance
Periods
on the timing of income inclusion under section 451(b).
Section 451 was amended by section 13221 of the Tax
2 Section 451 (b) Cuts and Jobs Act. These proposed rules affect accrual
NPRM
method taxpayers with an applicable financial
statement.
Under § 451(b), as amended, for an accrual method
3 Section 451 ( c ) taxpayer with an applicable financial statement, the “all
NPRM
events” test with respect to any item of gross income,
or portion thereof, is deemed to be met no later than
when such item, or portion thereof, is taken into
4 Corporate financial statement.
account as revenue in the taxpayer’s applicable
Methods of
These proposed regulations clarify the general rule for
Accounting
how the all events test applies to taxpayers with an
applicable financial statement. The proposed
regulations also detail exceptions and clarify that this
general rule does not change the applicability of any
exclusion provision, or the treatment of non-
recognition transactions of the Code.

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