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USC Title 26 enacted through 2008

§ 441. Period for computation of taxable income

 
(a)
Computation of taxable income
 
Taxable income shall be computed on the basis of the taxpayer's taxable year.
 
(b)
Taxable year
 
For purposes of this subtitle, the term "taxable year" means -
 
(1)
the taxpayer's annual accounting period, if it is a calendar year or a fiscal year;
 
(2)
the calendar year, if subsection (g) applies;
 
(3)
the period for which the return is made, if a return is made for a period of less than 12 months; or
 
(4)
in the case of a DISC filing a return for a period of at least 12 months, the period determined under subsection (h).
 
(c)
Annual accounting period
 
For purposes of this subtitle, the term "annual accounting period" means the annual period on the basis of which the taxpayer regularly computes his income in keeping his books.
 
(d)
Calendar year
 
For purposes of this subtitle, the term "calendar year" means a period of 12 months ending on December 31.
 
(e)
Fiscal year
 
For purposes of this subtitle, the term "fiscal year" means a period of 12 months ending on the last day of any month other than December. In the case of any taxpayer who has made the election provided by subsection (f) the term means the annual period (varying from 52 to 53 weeks) so elected.
 
(f)
Election of year consisting of 52-53 weeks
 
(1)
General rule
 
A taxpayer who, in keeping his books, regularly computes his income on the basis of an annual period which varies from 52 to 53 weeks and ends always on the same day of the week and ends always -
 
(A)
on whatever date such same day of the week last occurs in a calendar month, or
 
(B)
on whatever date such same day of the week falls which is nearest to the last day of a calendar month,
 
may (in accordance with the regulations prescribed under paragraph (3)) elect to compute his taxable income for purposes of this subtitle on the basis of such annual period. This paragraph shall apply to taxable years ending after the date of the enactment of this title.
 
(2)
Special rules for 52-53-week year
 
(A)
Effective dates
 
In any case in which the effective date or the applicability of any provision of this title is expressed in terms of taxable years beginning, including, or ending with reference to a specified date which is the first or last day of a month, a taxable year described in paragraph (1) shall (except for purposes of the computation under section 15) be treated -
 
(i)
as beginning with the first day of the calendar month beginning nearest to the first day of such taxable year, or
 
(ii)
as ending with the last day of the calendar month ending nearest to the last day of such taxable year,
 
as the case may be.
 
(B)
Change in accounting period
 
In the case of a change from or to a taxable year described in paragraph (1) -
 
(i)
if such change results in a short period (within the meaning of section 443) of 359 days or more, or of less than 7 days, section 443(b) (relating to alternative tax computation) shall not apply;
 
(ii)
if such change results in a short period of less than 7 days, such short period shall, for purposes of this subtitle, be added to and deemed a part of the following taxable year; and
 
(iii)
if such change results in a short period to which subsection (b) of section 443 applies, the taxable income for such short period shall be placed on an annual basis for purposes of such subsection by multiplying the gross income for such short period (minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions as described in section 443(c)) by 365, by dividing the result by the number of days in the short period, and the tax shall be the same part of the tax computed on the annual basis as the number of days in the short period is of 365 days.
 
(3)
Special rule for partnerships, S corporations, and personal service corporations
 
The Secretary may by regulation provide terms and conditions for the application of this subsection to a partnership, S corporation, or personal service corporation (within the meaning of section 441(i)(2)).
 
(4)
Regulations
 
The Secretary shall prescribe such regulations as he deems necessary for the application of this subsection.
 
(g)
No books kept; no accounting period
 
Except as provided in section 443 (relating to returns for periods of less than 12 months), the taxpayer's taxable year shall be the calendar year if -
 
(1)
the taxpayer keeps no books;
 
(2)
the taxpayer does not have an annual accounting period; or
 
(3)
the taxpayer has an annual accounting period, but such period does not qualify as a fiscal year.
 
(h)
Taxable year of DISC's
 
(1)
In general
 
For purposes of this subtitle, the taxable year of any DISC shall be the taxable year of that shareholder (or group of shareholders with the same 12-month taxable year) who has the highest percentage of voting power.
 
(2)
Special rule where more than one shareholder (or group) has highest percentage
 
If 2 or more shareholders (or groups) have the highest percentage of voting power under paragraph (1), the taxable year of the DISC shall be the same 12-month period as that of any such shareholder (or group).
 
(3)
Subsequent changes of ownership
 
The Secretary shall prescribe regulations under which paragraphs (1) and (2) shall apply to a change of ownership of a corporation after the taxable year of the corporation has been determined under paragraph (1) or (2) only if such change is a substantial change of ownership.
 
(4)
Voting power determined
 
For purposes of this subsection, voting power shall be determined on the basis of total combined voting power of all classes of stock of the corporation entitled to vote.
 
(i)
Taxable year of personal service corporations
 
(1)
In general
 
For purposes of this subtitle, the taxable year of any personal service corporation shall be the calendar year unless the corporation establishes, to the satisfaction of the Secretary, a business purpose for having a different period for its taxable year. For purposes of this paragraph, any deferral of income to shareholders shall not be treated as a business purpose.
 
(2)
Personal service corporation
 
For purposes of this subsection, the term "personal service corporation" has the meaning given such term by section 269A(b)(1), except that section 269A(b)(2) shall be applied -
 
(A)
by substituting "any" for "more than 10 percent", and
 
(B)
by substituting "any" for "50 percent or more in value" in section 318(a)(2)(C).
 
A corporation shall not be treated as a personal service corporation unless more than 10 percent of the stock (by value) in such corporation is held by employee-owners (within the meaning of section 269A(b)(2), as modified by the preceding sentence). If a corporation is a member of an affiliated group filing a consolidated return, all members of such group shall be taken into account in determining whether such corporation is a personal service corporation.








Tax Code (Internal Revenue Code) Section Index


U.S. GAAP by Codification Topic
 
105 GAAP Hierarchy
105 GAAP History

205 Presentation of Financial Statements
205-20 Discontinued Operations
210 Balance Sheet
210-20 Offsetting
220 Comprehensive Income
225 Income Statement
225-20 Extraordinary and Unusual Items
230 Statement of Cash Flows
250 Accounting Changes and Error Corrections
260 Earnings per Share
270 Interim Reporting

310 Impairment of a Loan
320 Investment Securities
320 Other-Than-Temporary Impairments, FSP FAS 115-2
320-10-05 Overview of Investments in Other Entities
320-10-35 Reclassification of Investments in Securities
323-10 Equity Method Investments
323-30 Investments in Partnerships and Joint Ventures
325-20 Cost Method Investments
330 Inventory

340-20 Capitalized Advertising Costs
350-20 Goodwill
350-30 Intangibles Other than Goodwill
350-40 Internal-Use Software
350-50 Website Development Costs
360 Property, Plant and Equipment
360-20 Real Estate Sales

410 Asset Retirement and Environmental Obligations
420 Exit or Disposal Cost Obligations
450 Contingencies
450-20 Loss Contingencies
450-30 Gain Contingencies
480 Redeemable Financial Instruments

505-20 Stock Dividends, Stock Splits
505-30 Treasury Stock

605 SEC Staff Accounting Bulletin, Topic 13
605-25 Revenue Recognition - Multiple Element Arrangements

715-30 Defined Benefit Plans - Pension
718 Share-Based Payment
730 Research and Development
730-20 Research and Development Arrangements

805 Business Combinations
810 Consolidation
810 Noncontrolling Interests
810 Consolidation of Variable Interest Entities, SFAS 167

815 Derivatives and Hedging Overview

820 Fair Value Measurements
820 Fair value when the markets are not active, FSP FAS 157-4
825 Fair Value Option

830 Foreign Currency Matters
830-20 Foreign Currency Transactions
830-30 Translation of Financial Statements
835 Interest
835-20 Capitalization of Interest
835-30 Imputation of Interest

840 Leases
840-20 Operating Leases
840-30 Capital Leases
840-40 Sale-Leaseback Transactions
845 Nonmonetary Transactions

855 Subsequent Events
860-20 Sale of Financial Assets, SFAS 166
860-50 Servicing Assets and Liabilities, SFAS 156

985-20 Costs of software to be sold


U.S. GAAP Codification
Accounting Topics
Tax Code (Internal Revenue Code) Section Index




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