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Internal Revenue Service, Treasury § 1.443–1
approval of an adoption, change, or retention in annual accounting period
through application to the national office; Rev. Proc. 2002–37, 2002–22 I.R.B.,
automatic approval procedures for certain corporations; Rev. Proc. 2002–38,
2002–22 I.R.B., automatic approval procedures for partnerships, S corporations, electing S corporations, and
PSCs; and Rev. Proc. 66–50, 1966–2 C.B.
1260, automatic approval procedures for
individuals. For availability of Revenue Procedures and Notices, see
§601.601(d)(2) of this chapter.
(4) Taxpayers to whom section 441(g)
applies. If section 441(g) and §1.441–
1(b)(1)(iv) apply to a taxpayer, the
adoption of a fiscal year is treated as a
change in the taxpayer’s annual accounting period under section 442.
Therefore, that fiscal year can become
the taxpayer’s taxable year only with
the approval of the Commissioner. In
addition to any other terms and conditions that may apply to such a change,
the taxpayer must establish and maintain books that adequately and clearly
reflect income for the short period involved in the change and for the fiscal
year proposed.
(c) Special rule for change of annual
accounting period by subsidiary corporation. A subsidiary corporation that is
required to change its annual accounting period under §1.1502–76, relating to
the taxable year of members of an affiliated group that file a consolidated
return, does not need to obtain the approval of the Commissioner or file an
application on Form 1128 with respect
to that change.
(d) Special rule for newly married couples. (1) A newly married husband or
wife may obtain automatic approval
under this paragraph (d) to change his
or her annual accounting period in
order to use the annual accounting period of the other spouse so that a joint
return may be filed for the first or second taxable year of that spouse ending
after the date of marriage. Such automatic approval will be granted only if
the newly married husband or wife
adopting the annual accounting period
of the other spouse files a Federal income tax return for the short period required by that change on or before the
15th day of the 4th month following the
close of the short period. See section
443 and the regulations thereunder. If
the due date for any such short-period
return occurs before the date of marriage, the first taxable year of the
other spouse ending after the date of
marriage cannot be adopted under this
paragraph (d). The short-period return
must contain a statement at the top of
page one of the return that it is filed
under the authority of this paragraph
(d). The newly married husband or wife
need not file Form 1128 with respect to
a change described in this paragraph
(d). For a change of annual accounting
period by a husband or wife that does
not qualify under this paragraph (d),
see paragraph (b) of this section.
(2) The provisions of this paragraph
(d) may be illustrated by the following
example:
Example. H & W marry on September 25,
2001. H is on a fiscal year ending June 30, and
W is on a calendar year. H wishes to change
to a calendar year in order to file joint returns with W. W’s first taxable year after
marriage ends on December 31, 2001. H may
not change to a calendar year for 2001 since,
under this paragraph (d), he would have had
to file a return for the short period from
July 1 to December 31, 2000, by April 16, 2001.
Since the date of marriage occurred subsequent to this due date, the return could not
be filed under this paragraph (d). Therefore,
H cannot change to a calendar year for 2001.
However, H may change to a calendar year
for 2002 by filing a return under this paragraph (d) by April 15, 2002, for the short period from July 1 to December 31, 2001. If H
files such a return, H and W may file a joint
return for calendar year 2002 (which is W’s
second taxable year ending after the date of
marriage).
(e) Effective date. The rules of this
section are applicable for taxable years
ending on or after May 17, 2002.
[T.D. 8996, 67 FR 35019, May 17, 2002]
§ 1.443–1 Returns for periods of less
than 12 months.
(a) Returns for short period. A return
for a short period, that is, for a taxable
year consisting of a period of less than
12 months, shall be made under any of
the following circumstances:
(1) Change of annual accounting period. In the case of a change in the annual accounting period of a taxpayer, a
separate return must be filed for the
short period of less than 12 months beginning with the day following the
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22
§ 1.443–1 26 CFR Ch. I (4–1–03 Edition)
close of the old taxable year and ending
with the day preceding the first day of
the new taxable year. However, such a
return is not required for a short period of six days or less, or 359 days or
more, resulting from a change from or
to a 52–53-week taxable year. See section 441(f) and §1.441–2. The computation of the tax for a short period required to effect a change of annual accounting period is described in paragraph (b) of this section. In general, a
return for a short period resulting from
a change of annual accounting period
shall be filed and the tax paid within
the time prescribed for filing a return
for a taxday of the short period. For
rules applicable to a subsidiary corporation which becomes a member of
an affiliated group which files a consolidated return, see §1.1502–76.
(2) Taxpayer not in existence for entire
taxable year. If a taxpayer is not in existence for the entire taxable year, a
return is required for the short period
during which the taxpayer was in existence. For example, a corporation organized on August 1 and adopting the calendar year as its annual accounting period is required to file a return for the
short period from August 1 to December 31, and returns for each calendar
year thereafter. Similarly, a dissolving
corporation which files its returns for
the calendar year is required to file a
return for the short period from January 1 to the date it goes out of existence. Income for the short period is not
required to be annualized if the taxpayer is not in existence for the entire
taxable year, and, in the case of a taxpayer other than a corporation, the deduction under section 151 for personal
exemptions (or deductions in lieu
thereof) need not be reduced under section 443(c). In general, the requirements with respect to the filing of returns and the payment of tax for a
short period where the taxpayer has
not been in existence for the entire
taxable year are the same as for the filing of a return and the payment of tax
for a taxable year of 12 months ending
on the last day of the short period. Although the return of a decedent is a return for the short period beginning
with the first day of his last taxable
year and ending with the date of his
death, the filing of a return and the
payment of tax for a decedent may be
made as though the decedent had lived
throughout his last taxable year.
(b) Computation of tax for short period
on change of annual accounting period—
(1) General rule. (i) If a return is made
for a short period resulting from a
change of annual accounting period,
the taxable income for the short period
shall be placed on an annual basis by
multiplying such income by 12 and dividing the result by the number of
months in the short period. Unless section 443(b)(2) and subparagraph (2) of
this paragraph apply, the tax for the
short period shall be the same part of
the tax computed on the annual basis
as the number of months in the short
period is of 12 months.
(ii) If a return is made for a short period of more than 6 days, but less than
359 days, resulting from a change from
or to a 52–53-week taxable year, the
taxable income for the short period
shall be annualized and the tax computed on a daily basis, as provided in
section 441(f)(2)(B)(iii) and §1.441–
2(b)(2)(ii).
(iii) For method of computation of
income for a short period in the case of
a subsidiary corporation required to
change its annual accounting period to
conform to that of its parent, see
§1.1502–76(b).
(iv) An individual taxpayer making a
return for a short period resulting from
a change of annual accounting period is
not allowed to take the standard deduction provided in section 141 in computing his taxable income for the short
period. See section 142(b)(3).
(v) In computing the taxable income
of a taxpayer other than a corporation
for a short period (which income is to
be annualized in order to determine the
tax under section 443(b)(1)) the personal
exemptions allowed individuals under
section 151 (and any deductions allowed
other taxpayers in lieu thereof, such as
the deduction under section 642(b))
shall be reduced to an amount which
bears the same ratio to the full amount
of the exemptions as the number of
months in the short period bears to 12.
In the case of the taxable income for a
short period resulting from a change
from or to a 52–53-week taxable year to
which section 441(f)(2)(B)(iii) applies,
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23
Internal Revenue Service, Treasury § 1.443–1
the computation required by the preceding sentence shall be made on a
daily basis, that is, the deduction for
personal exemptions (or any deduction
in lieu thereof) shall be reduced to an
amount which bears the same ratio to
the full deduction as the number of
days in the short period bears to 365.
(vi) If the amount of a credit against
the tax (for example, the credits allowable under section 34 (for dividends received on or before December 31, 1964),
and 35 (for partially tax-exempt interest)) is dependent upon the amount of
any item of income or deduction, such
credit shall be computed upon the
amount of the item annualized separately in accordance with the foregoing
rules. The credit so computed shall be
treated as a credit against the tax computed on the basis of the annualized
taxable income. In any case in which a
limitation on the amount of a credit is
based upon taxable income, taxable income shall mean the taxable income
computed on the annualized basis.
(vii) The provisions of this subparagraph may be illustrated by the following examples:
Example (1). A taxpayer with one dependent
who has been granted permission under section 442 to change his annual accounting period files a return for the short period of 10
months ending October 31, 1956. He has income and deductions as follows:
Income
Interest income .............. .............. ................ $10,000.00
Partially tax-exempt interest with respect to
which a credit is allowable under section 35 .............. ................ 500.00
Dividends to which sections 34 and 116 are
applicable ................... .............. ................ 750.00
11,250.00
Deductions
Real estate taxes ........... .............. ................ 200.00
2 personal exemptions at
$600 on an annual
basis ........................... .............. ................ 1,200.00
The tax for the 10-month
period is computed as
follows:
Total income as above .. .............. ................ 11,250.00
Less:
Exclusion for dividends
received .................. .............. $50.00
2 personal exemptions
($1,200×10⁄12) .......... .............. 1,000.00
Real estate taxes ....... .............. 200.00
———— 1,250.00
Taxable income for
10-month period
before annualizing .............. ................ 10,000.00
Taxable income
annualized
(10,000×12⁄10) ............. .............. ................ 12,000.00
Tax on $12,000 before
credits ......................... .............. ................ 3,400.00
Deduct credits:
Dividends received for
10-month period ...... $750.00
Less: Excluded portion 50.00
Included in gross income ....................... 700.00
Dividend income
annualized
($700×12⁄10) ............. 840.00
Credit (4 percent of
$840) ....................... .............. 33.60
Partially tax-exempt interest included in
gross income for 10-
month period ........... 500.00
Partially tax-exempt interest (annualized)
($500×12⁄10) ............. 600.00
Credit (3 percent of
$600) ....................... .............. 18.00
———— 51.60
Tax on $12,000
(after credits) ....... .............. ................ 3,348.40
Tax for 10-month period
($3,348.40×10⁄12) ........ .............. ................ 2,790.33
Example (2). The X Corporation makes a return for the one-month period ending September 30, 1956, because of a change in annual accounting period permitted under section 442. Income and expenses for the short
period are as follows:
Gross operating income ........................................ $126,000
Business expenses ................................................ 130,000
Net loss from operations ....................................... (4,000)
Dividends received from taxable domestic corporations ............................................................. 30,000
Gross income for short period before
annualizing .................................................. 26,000
Dividends received deduction (85 percent of
$30,000, but not in excess of 85 percent of
$26,000) ............................................................. 22,100
Taxable income for short period before
annualizing .................................................. 3,900
Taxable income annualized ($8,900×12) .............. 46,800
Tax on annual basis:
$46,800 at 52 percent ................ $24,336
Less surtax exemption ............... 5,500
———— $18,836
Tax for 1-month period ($18,836×1⁄12) .................. 1,570
Example (3). The Y Corporation makes a return for the six-month period ending June 30,
1957, because of a change in annual accounting period permitted under section 442. Income for the short period is as follows:
Taxable income exclusive of net long-term capital
gain ..................................................................... $40,000
Net long-term capital gain ..................................... 10,000
Taxable income for short period before
annualizing .................................................. 50,000
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§ 1.443–1 26 CFR Ch. I (4–1–03 Edition)
Taxable income annualized ($50,000×12⁄6) ........... 100,000
Regular tax computation
Taxable income annualized ................................... 100,000
Tax on annual basis:
$100,000 at 52 percent .............. $52,000
Less surtax exemption ............... 5,500
46,500
Tax for 6-month period ($46,500×6⁄12) .................. 23,250
Alternative tax computation
Taxable income annualized ................................... 100,000
Less annualized capital gain ($10,000×12⁄6) ......... 20,000
Annualized taxable income subject to partial
tax ............................................................... 80,000
Partial tax on annual basis
$60,000 at 52 percent ....................... $41,600
Less surtax exemption ....................... 5,500
———— 36,100
25 percent of annualized capital gain ($20,000) ... 5,000
Alternative tax on annual basis ...................... 41,100
Alternative tax for 6-month period ($41,100×6⁄12) 20,550
Since the alternative tax of $20,550 is less
than the tax computed in the regular manner ($23,250), the corporation’s tax for the 6-
month short period is $20,550.
(2) Exception: computation based on 12-
month period. (i) A taxpayer whose tax
would otherwise be computed under
section 443(b)(1) (or section
441(f)(2)(B)(iii) in the case of certain
changes from or to a 52–53-week taxable year) for the short period resulting from a change of annual accounting
period may apply to the district director to have his tax computed under the
provisions of section 443(b)(2) and this
subparagraph. If such application is
made, as provided in subdivision (v) of
this subparagraph, and if the taxpayer
establishes the amount of his taxable
income for the 12-month period described in subdivision (ii) of this subparagraph, then the tax for the short
period shall be the greater of the following—
(a) An amount which bears the same
ratio to the tax computed on the taxable income which the taxpayer has established for the 12-month period as
the taxable income computed on the
basis of the short period bears to the
taxable income for such 12-month period; or
(b) The tax computed on the taxable
income for the short period without
placing the taxable income on an annual basis.
However, if the tax computed under
section 443(b)(2) and this subparagraph
is not less than the tax for the short
period computed under section 443(b)(1)
(or section 441(f)(2)(B)(iii) in the case of
certain changes from or to a 52–53-week
taxable year), then section 443(b)(2) and
this subparagraph do not apply.
(ii) The term ‘‘12-month period’’ referred to in subdivision (i) of this subparagraph means the 12-month period
beginning on the first day of the short
period. However, if the taxpayer is not
in existence at the end of such 12-
month period, or if the taxpayer is a
corporation which has disposed of substantially all of its assets before the
end of such 12-month period, the term
‘‘12-month period’’ means the 12-month
period ending at the close of the last
day of the short period. For the purposes of the preceding sentence, a corporation which has ceased business and
distributed so much of the assets used
in its business that it cannot resume
its customary operations with the remaining assets, will be considered to
have disposed of substantially all of its
assets. In the case of a change from a
52–53-week taxable year, the term ‘‘12-
month period’’ means the period of 52
or 53 weeks (depending on the taxpayer’s 52–53-week taxable year) beginning on the first day of the short period.
(iii)(a) The taxable income for the 12-
month period is computed under the
same provisions of law as are applicable to the short period and is computed
as if the 12-month period were an actual annual accounting period of the
taxpayer. All items which fall in such
12-month period must be included even
if they are extraordinary in amount or
of an unusual nature. If the taxpayer is
a member of a partnership, his taxable
income for the 12-month period shall
include his distributive share of partnership income for any taxable year of
the partnership ending within or with
such 12-month period, but no amount
shall be included with respect to a taxable year of the partnership ending before or after such 12-month period. If
any other item partially applicable to
such 12-month period can be determined only at the end of a taxable year
which includes only part of the 12-
month period, the taxpayer, subject to
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25
Internal Revenue Service, Treasury § 1.443–1
review by the Commissioner, shall apportion such item to the 12-month period in such manner as will most clearly reflect income for the 12-month period.
(b) In the case of a taxpayer permitted or required to use inventories,
the cost of goods sold during a part of
the 12-month period included in a taxable year shall be considered, unless a
more exact determination is available,
as such part of the cost of goods sold
during the entire taxable year as the
gross receipts from sales for such part
of the 12-month period is of the gross
receipts from sales for the entire taxable year. For example, the 12-month
period of a corporation engaged in the
sale of merchandise, which has a short
period from January 1, 1956, to September 30, 1956, is the calendar year
1956. The three-month period, October
1, 1956, to December 31, 1956, is part of
the taxpayer’s taxable year ending September 30, 1957. The cost of goods sold
during the three-month period, October
1, 1956, to December 31, 1956, is such
part of the cost of goods sold during
the entire fiscal year ending September
30, 1957, as the gross receipts from sales
for such three-month period are of the
gross receipts from sales for the entire
fiscal year.
(c) The Commissioner may, in granting permission to a taxpayer to change
his annual accounting period, require,
as a condition to permitting the
change, that the taxpayer must take a
closing inventory upon the last day of
the 12-month period if he wishes to obtain the benefits of section 443(b)(2).
Such closing inventory will be used
only for the purposes of section
443(b)(2), and the taxpayer will not be
required to use such inventory in computing the taxable income for the taxable year in which such inventory is
taken.
(iv) The provisions of this subparagraph may be illustrated by the following examples:
Example (1). The taxpayer in example (1)
under paragraph (b)(1)(vii) of this section establishes his taxable income for the 12-
month period from January 1, 1956, to December 31, 1956. The taxpayer has a short period of 10 months, from January 1, 1956, to
October 31, 1956. The taxpayer files an application in accordance with subdivision (v) of
this subparagraph to compute his tax under
section 443(b)(2). The taxpayer’s income and
deductions for the 12-month period, as so established, follow:
Income
Interest income ........................................................ $11,000
Partially tax-exempt interest with respect to which
a credit is allowable under section 35 ................. 600
Dividends to which sections 34 and 116 are applicable ..................................................................... 850
12,450
Deductions
Real estate taxes ..................................................... 200
2 personal exemptions at $600 ............................... 1,200
Tax computation for short period under section
443(b)(2)(A)(i)
Total income as above ............................................ $12,450
Less:
Exclusion for dividends received ............... $50
Personal exemptions ................................. 1,200
Deduction for taxes .................................... 200
1,450
Taxable income for 12-month period ............ 11,000
Tax before credits .................................................... 3,020
Credit for partially tax-exempt interest (3
percent of $600) ..................................... 18
Credit for dividends received (4 percent of
($850¥50)) ............................................ 32
50
Tax under section 443(b)(2)(A)(i) for 12-month period ....................................................................... 2,970
Taxable income for 10-month short period from example (1) of paragraph (b)(1)(vii) of this section
before annualizing ................................................ 10,000
Tax for short period under section 443(b)(2)(A)(i)
($2,970×$10,000 (taxable income for short period)/$11,000 (taxable income for 12-month period)) ..................................................................... 2,700
Tax computation for short period under section
443(b)(2)(A)(ii)
Total income for 10-month short period .................. 11,250
Less:
Exclusion for dividends received ........ 50
2 personal exemptions ....................... 1,200
Real estate taxes ................................ 200
1,450
Taxable income for short period without
annualizing and without proration of personal exemptions .......................................... 9,800
Tax before credits .................................................... 2,572
Less credits:
Partially tax-exempt interest (3 percent of $500) ................................... 15
Dividends received (4 percent of
($750¥50)) ..................................... 28
43
Tax for short period under section
443(b)(2)(A)(ii) ............................................... 2,529
The tax of $2,700 computed under section
443(b)(2)(A)(i) is greater than the tax of
$2,529, computed under section
443(b)(2)(A)(ii), and is, therefore, the tax
under section 443(b)(2). Since the tax of $2,700
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26
§ 1.443–1 26 CFR Ch. I (4–1–03 Edition)
(computed under section 443(b)(2)) is less
than the tax of $2,790.33 (computed under section 443(b)(1)) on the annualized income of
the short period (see example (1) of paragraph (b)(1)(vii) of this section), the taxpayer’s tax for the 10-month short period is
$2,700.
Example (2). Assume the same facts as in
example (1) of this subdivision, except that,
during the month of November 1956, the taxpayer suffered a casualty loss of $5,000. The
tax computation for the short period under
section 443(b)(2) would be as follows:
Tax computation for short period under section
443(b)(2)(A)(i)
Taxable income for 12-month period from example
(1) ......................................................................... $11,000
Less: Casualty loss .................................................. 5,000
Taxable income for 12-month period ............ 6,000
Tax before credits .................................. $1,360
Credits from example (1) ....................... 50
Tax under section 443(b)(2)(A)(i) for 12-
month period ...................................... 1,310
Tax for short period ($1,310× $10,000/
$6,000) under section 443(b)(2)(A)(i) 2,183
Tax computation for short period under
section 443(b)(2)(A)(ii)
Total income for the short period .......... 11,250
Less:
Exclusion for dividends received .... 50
2 personal exemptions ................... 1,200
Real estate taxes ............................ 200
1,450
Taxable income for short period without
annualizing and without proration of personal exemptions .......................................... 9,800
Tax before credits .................................................... 2,572
Less credits:
Partially tax-exempt interest (3 percent of $500) ............................... 15
Dividends received (4 percent of
$750¥50)) .................................. 28
43
Tax for short period under section 443(b)(2)(A)(ii) 2,529
The tax of $2,529, computed under section
443(b)(2)(A)(ii) is greater than the tax of
$2,183 computed under section 443(b)(2)- (A)(i)
and is, therefore, the tax under section
443(b)(2). Since this tax is less than the tax of
$2,790.33, computed under section 443(b)(1)
(see example (1) of paragraph (b)(1)(vii) of
this section), the taxpayer’s tax for the 10-
month short period is $2,529.
(v)(a) A taxpayer who wishes to compute his tax for a short period resulting
from a change of annual accounting period under section 443(b)(2) must make
an application therefor. Except as provided in (b) of this subdivision, the taxpayer shall first file his return for the
short period and compute his tax under
section 443(b)(1). The application for
the benefits of section 443(b)(2) shall
subsequently be made in the form of a
claim for credit or refund. The claim
shall set forth the computation of the
taxable income and the tax thereon for
the 12-month period and must be filed
not later than the time (including extensions) prescribed for filing the return for the taxpayer’s first taxable
year which ends on or after the day
which is 12 months after the beginning
of the short period. For example, assume that a taxpayer changes his annual accounting period from the calendar year to a fiscal year ending September 30, and files a return for the
short period from January 1, 1956, to
September 30, 1956. His application for
the benefits of section 443(b)(2) must be
filed not later than the time prescribed
for filing his return for his first taxable
year which ends on or after the last
day of December 1956, the twelfth
month after the beginning of the short
period. Thus, the taxpayer must file his
application not later than the time
prescribed for filing the return for his
fiscal year ending September 30, 1957. If
he obtains an extension of time for filing the return for such fiscal year, he
may file his application during the period of such extension. If the district
director determines that the taxpayer
has established the amount of his taxable income for the 12-month period,
any excess of the tax paid for the short
period over the tax computed under
section 443(b)(2) will be credited or refunded to the taxpayer in the same
manner as in the case of an overpayment.
(b) If at the time the return for the
short period is filed, the taxpayer is
able to determine that the 12-month
period ending with the close of the
short period (see section 443(b)(2)-
(B)(ii) and subparagraph (2)(ii) of this
paragraph) will be used in the computations under section 443(b)(2), then
the tax on the return for the short period may be determined under the provisions of section 443(b)(2). In such
case, a return covering the 12-month
period shall be attached to the return
for the short period as a part thereof,
and the return and attachment will
then be considered as an application
for the benefits of section 443(b)(2).
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27
Internal Revenue Service, Treasury § 1.444–0T
(c) Adjustment in deduction for personal exemption. For adjustment in the
deduction for personal exemptions in
computing the tax for a short period
resulting from a change of annual accounting period under section 443(b)(1)
(or under section 441(f)(2)(B)(iii) in the
case of certain changes from or to a 52–
53-week taxable year), see paragraph
(b)(1)(v) of this section.
(d) Adjustments in exclusion of computing minimum tax for tax preferences.
(1) If a return is made for a short period on account of any of the reasons
specified in subsection (a) of section
443, the $30,000 amount specified in section 56 (relating to minimum tax for
tax preferences), modified as provided
by section 58 and the regulations thereunder, shall be reduced to the amount
which bears the same ratio to such
specified amount as the number of days
in the short period bears to 365.
(2) Example. The provisions of this
paragraph may be illustrated by the
following example:
Example. A taxpayer who is an unmarried
individual has been granted permission
under section 442 to change his annual accounting period files a return for the short
period of 4 months ending April 30, 1970. The
$30,000 amount specified in section 56 is reduced as follows:
(120/365)×$30,000=$9,835.89.
(e) Cross references. For inapplicability of section 443(b) and paragraph
(b) of this section in computing—
(1) Accumulated earnings tax, see
section 536 and the regulations thereunder;
(2) Personal holding company tax, see
section 546 and the regulations thereunder;
(3) Undistributed foreign personal
holding company income, see section
557 and the regulations thereunder;
(4) The taxable income of a regulated
investment company, see section
852(b)(2)(E) and the regulations thereunder; and
(5) The taxable income of a real estate investment trust, see section
857(b)(2)(C) and the regulations thereunder.
[T.D. 6500, 25 F.R. 11705, Nov. 26, 1960, as
amended by T.D. 6598, 27 FR 4093, Apr. 28,
1962; T.D. 6777, 29 FR 17808, Dec. 16, 1964; T.D.
7244, 37 FR 28897, Dec. 30, 1972, T.D. 7564, 43
FR 40494, Sept. 12, 1978; T.D. 7575, 43 FR 58816,
Dec. 18, 1978; T.D. 7767, 465 FR 11265, Feb. 6,
1981; T.D. 8996, 67 FR 35012, May 17, 2002]
§ 1.444–0T Table of contents (temporary).
This section lists the captions that
appear in the temporary regulations
under section 444.
§1.444–1T Election to use a taxable year other
than the required taxable year (temporary).
(a) General rules.
(1) Year other than required year.
(2) Effect of section 444 election.
(i) In general.
(ii) Duration of section 444 election.
(3) Section 444 election not required for
certain years.
(4) Required taxable year.
(5) Termination of section 444 election.
(i) In general.
(ii) Effective date of termination.
(iii) Example.
(iv) Special rule for entity that liquidates
or is sold prior to making a section 444 election, required return, or required payment.
(6) Re-activating certain S elections.
(i) Certain corporations electing S status
that did not make a back-up calendar year
request.
(ii) Certain corporations that revoked their
S status.
(iii) Procedures for re-activating an S election.
(iv) Examples.
(b) Limitation on taxable years that may
be elected.
(1) General rule.
(2) Changes in taxable year.
(i) In general.
(ii) Special rule for certain existing corporations electing S status.
(iii) Deferral period of the taxable year
that is being changed.
(iv) Examples.
(3) Special rule for entities retaining 1986
taxable year.
(4) Deferral period.
(i) Retentions of taxable year.
(ii) Adoptions of and changes in taxable
year.
(A) In general.
(B) Special rule.