(a) Miscellaneous elections--(1) Elections to which this paragraph applies. This paragraph applies to the elections set forth below provided under the Technical and Miscellaneous Revenue Act of 1988, 102 Stat. 3342 (the Act). General rules regarding the time for making the elections are provided in paragraph (a)(2) of this section. General rules regarding the manner for making the elections are provided in paragraph (a)(3) of this section. Special rules regarding the time and manner for making certain elections are contained in paragraphs (a) through (i) of this section. In this paragraph (a)(1), a cross-reference to a special rule applicable to an election is shown in brackets at the end of the description of the ``Availability of Election.'' Paragraph (j) of this section lists certain elections provided under the Act that are not addressed in this section. Paragraph (k) of this section provides that additional information with respect to elections may be required by future regulations or revenue procedures. ------------------------------------------------------------------------
Description of Availability of
Section of act Section of code election election------------------------------------------------------------------------1002 (a)(11)(A) 168(b)(2)........ Election to For property
depreciate placed in
property using service after
the 150 percent December 31,
declining 1986, the
balance method election must be
for one or more made for the
classes of taxable year in
property for any which the
taxable year. property is
placed in
service. For
taxable years
ending before
January 1, 1989,
taxpayers have
until January
22, 1990, to
amend their
returns to elect
the 150 percent
declining
balance method,
regardless of
whether the
taxpayer had
used or elected
to use a
different method
for property
placed in
service during
those taxable
years. The
election will
apply to all
property in the
class placed in
service during
the taxable year
for which the
election is
made.1002(a)(23)(B). 168(d)(3)(B)..... Election to Available for
disregard property placed
property placed in service in
in service and taxable years
disposed of in beginning on or
the same taxable before March 31,
year in applying 1988. Election
the 40 percent will apply to
test to all property
determine if the placed in
mid-quarter service and
convention disposed of
applies. during the
taxable year for
which the
election is
made.1002(l)(1)(A).. 42(b)(2)(A)(ii).. Election to use Available for
the applicable qualified
percentage for a buildings placed
month other than in service after
the month in December 31,
which a building 1987, and with
is placed in respect to which
service. either a binding
agreement is
made as to the
allocable credit
dollar amount or
tax-exempt bonds
are issued. [See
paragraph (b) of
this section.]1002(l)(2)(B).. 42(f)(1)......... Election to defer Available for
the beginning of qualified
the credit buildings placed
period for the in service after
low-income December 31,
housing credit. 1986.1002(l)(4)..... 42(d)(3)(B)...... Election to Available for
exclude excess qualified
costs of buildings placed
disproportionate in service after
units. December 31,
1986.1002(l)(12).... 42(g)(3)(B)(i)... Election to Available for
aggregate qualified
buildings in a buildings placed
low-income in service after
housing project December 31,
to satisfy the 1986.
minimum set-
aside
requirement
elected under
section 42(g)(1)
of the Code.1002(l)(19)(B). 42(i)(2)(B)...... Election to Available for
reduce eligible qualified
basis by buildings placed
outstanding in service after
balance of December 31,
Federal loan 1986.
subsidy or
proceeds of tax-
exempt
obligation.1005(c)(11).... 469,163.......... Election to treat Available for
certain investment
carryovers of interest that is
disallowed disallowed for
investment the last taxable
interest expense year beginning
as passive before January
activity 1, 1987, and is
deductions for properly
the first allocable to a
taxable year passive activity
beginning after for the first
December 31, taxable year
1986. beginning after
December 31,
1986. [See
paragraph (c) of
this section.]1006(d)(15).... 382.............. As a general Available to any
rule, a firm loss corporation
commitment to which the
underwriter of general rule
an offering of a would otherwise
loss apply. The
corporation's election is to
stock made be made by
before September filing a
19, 1986 statement with
(January 1, the District
1989, for an Director with
institution whom the loss
described in corporation
section 591) is would file its
not treated as Federal income
acquiring tax return. The
underwritten statement must
stock if it is identify the
disposed of election as an
pursuant to the election under
offering on or section
before 60 days 1006(d)(15) of
after the the Act and must
initial (1) contain the
offering. The taxpayer's name,
loss corporation address, and
may elect not to employee
apply the identification
general rule. number, (2)
identify the
transaction to
which the
election
relates, (3)
represent that
the conditions
for making the
election have
been satisfied,
and (4) be
signed by a
person
authorized to
sign the Federal
income tax
return of the
loss
corporation.
1006(j)(1)(C).. 171(e)........... Election to Available for
reduce interest obligations
payments acquired after
received on October 22,
certain bonds by 1986, and before
allocable bond January 1, 1988.
premium in
accordance with
section 171(e)
of the Code.1006(t)(18)(B). 860F(e).......... Election not Available for
treat a REMIC REMICs with a
(real estate start-up date
mortgage (as defined in
investment section
conduit) as a 860G(a)(9) of
partnership for the Code, as in
purposes of effect on
determining who November 9,
may sign the 1988) before
REMIC return. November 10,
1988. The
election is made
by attaching a
statement to the
amended tax
return for tax
year 1987 or to
the tax return
for the first
taxable year for
which the
election is to
be effective.1008(c)(4)(A).. 460(b)(3)........ Election not to Effective as if
discount an included in the
amount received Tax Reform Act
or accrued after of 1986 (1986
completion of a Act) (available
contract to its for contracts
value as of the entered into
completion of after February
the contract for 28, 1986). The
purposes of election must be
applying the made on a
look-back method. contract-by-
contract basis
by attaching a
statement to the
tax return for
the first year
after completion
in which the
taxpayer
includes in
income any
adjustments to
the contract
price or deducts
any adjustments
to contract
costs (or, if
later, the first
tax return filed
after October
23, 1989).1009(d)........ 165(1)........... Election to treat Available for
amount of taxable years
reasonably beginning after
estimated loss December 31,
on a deposit in 1981. [See
an insolvent or paragraph (d) of
bankrupt this section.]
qualified
financial
institution as a
loss described
in either
section 165(c)
(2) or (3) of
the Code and
incurred in the
taxable year for
which the
election is made.1010(f)(1)..... 831(b)(2)(A)..... Election for Available for
insurance taxable years
companies other beginning after
than life to use December 31,
alternative tax 1986.
under certain
circumstances.1010(f)(2)..... 835(a)........... Election for an Available for
interinsurer or taxable years
reciprocal beginning after
underwirter December 31,
mutual insurance 1986.
company subject
to section
831(a) of the
Code to be
subject to
section 835(b)
limitation.1011(a)........ 219(g)(4)........ Election to treat Available to a
a married married
individual as individual who
not married for (1) was an
purposes of active
certain participant
contributions during 1987, (2)
made to an lived apart from
individual the other spouse
retirement plan during the
for 1987. entire 1987
calendar year,
(3) filed a
separate income
tax return for
1987, (4) had
adjusted gross
income of not
more than
$35,000 for
1987, and (5)
made a
contribution to
an individual
retirement plan
for 1987.1012(d)(4)..... 865(f)........... Election to treat Shareholder-level
an affiliate and election,
its wholly-owned available,
subsidiaries as subject to
one corporation. certain
conditions, to
United States
residents
selling stock in
an affiliate
which is a
foreign
corporation.
Available for
taxable years
beginning after
December 31,
1986.1012(d)(6)..... 865(g)(3)........ Election to treat Shareholder-level
a corporation election,
and its wholly- available only
owned to individual
subsidiaries as bona fide
one corporation. residents of
Puerto Rico, if
the corporate
group is engaged
in active trade
or business in
Puerto Rico and
meets a gross
income test.
Available for
taxable years
beginning after
December 31,
1986.1012(d)(8)..... 865(h)(2)........ Election to apply Taxpayer election
treaty source for treatment of
rule to treat gain on the
gain from a sale disposition of
of an intangible certain stocks
or of stock in a and intangibles.
foreign Available for
corporation as taxable years
foreign source. beginning after
December 31,
1986.1012(1)(2)..... 245(a)(10)....... Election to apply Available to
treaty source corporations for
rules to treat distributions
dividends out of earnings
received from a and profits for
qualified 10- taxable years
percent owned beginning after
foreign December 31,
corporation as 1986.
foreign source.
1012(n)(3)..... 936.............. Election to Corporate-level
reduce the election,
amount of available for
qualified any taxable year
possession beginning in
source 1987 or 1988.
investment
income for
certain
corporations
that fail the 75
percent active
trade or
business income
requirement of
section
936(a)(2)(B) of
the Code due to
section 1231(d)
of the 1986 Act.1012(bb)(4).... 904(g)(10)....... Election to apply Available
treaty source generally
rules (in lieu beginning July
of rules in 18, 1984 (the
section 904(g) amendment is to
of the Code) to take effect as
treat an amount if included in
derived from a the amendment
U.S.-owned made in section
foreign 121 of the Tax
corporation as Reform Act of
foreign source. 1984).1014(c)(1)..... 664(b)........... Election by a Available for
beneficiary of a taxable years
trust to which beginning after
section 664 of December 31,
the Code applies 1986, provided
to obtain the trust was
certain benefits required to
of section change its
1403(c)(2) of taxable year
the 1986 Act, under section
relating to the 1403(a) of the
ratable 1986 Act.
inclusion of Election is made
certain income by attaching a
over 4 taxable statement to an
years. amended return
for the trust
beneficiary's
first taxable
year beginning
after December
31, 1986.
Amended return
must be filed on
or before
January 22,
1990. If no such
election is
filed, the
benefits of
section
1403(c)(2) are
waived.1014(c)(2)..... 652, 662......... Election by any Available for
trust taxable years
beneficiary beginning after
(other than a December 31,
beneficiary of a 1986. Election
trust to which is made by
section 664 of attaching a
the Code statement to an
applies), to amended return
waive the for the trust
benefits of beneficiary's
section first taxable
1403(c)(2) of year beginning
the 1986 Act. after December
31, 1986.
Amended return
must be filed on
or before
January 22,
1990.1014(d)(3)(B), 643(g)(2)........ Election to have Available for
1014(d)(4). certain payments taxable years
of estimated tax beginning after
made by a trust December 31,
or estate 1986. In the
treated as paid case of an
by the estate, the
beneficiary. election is
available only
for a taxable
year reasonably
expected to be
the estate's
last taxable
year. Election
must be made by
the fiduciary of
the trust or
estate on or
before the 65th
day after the
close of the
taxable year for
which the
election is
made. The
election must be
made by that
date by filing
Form 1041-T with
the Internal
Revenue Service
Center where the
trust's return
for such taxable
year is required
to be filed. The
trust's return
(or amended
return) for that
year must
include a copy
of the Form 1041-
T.2004(j)(1)..... 1503(e).......... Election, made by Available to an
an affiliated affiliated group
group filing a filing a
consolidated consolidated
return upon the return in which
disposition of a member
intragroup stock disposes of
on or before intragroup stock
December 15, on or before
1987, to reduce December 15,
the disposing 1987.
member's basis
in the
indebtedness of
the subsidiary
member whose
stock has been
disposed of, in
lieu of taking
into account as
negative basis
the
``unrecaptured
amount''
allocable to the
stock disposed
of.2004(m)(5)..... 384.............. Election to have Available when
amendments (to the acquisition
the limitation date is before
on use of March 31, 1988.
preacquisition Election must be
losses to offset made not later
corporate built- than the later
in gains) made of the due date
by section (including
2004(m) of the extensions) for
Act not apply in filing the
any case where return for the
the acquisition taxable year of
date is before the acquiring
March 31, 1988. corporation in
which the
acquisition date
occurs or March
10, 1989.4004(a)........ 42(j)(5)(B)...... Election to have Available for
certain qualified
partnerships not buildings placed
treated as the in service after
taxpayer to December 31,
which the low- 1986, and owned
income housing by partnerships
credit is with 35 or more
allowable. partners. [See
paragraph (b) of
this section.]
4008(b)........ 41(h)............ Election to have Available in any
the research taxable year
credit under beginning after
secction 41 of December 31,
the Code not 1988. The
apply for any election is made
taxable year. by not claiming
the research
credit on an
original return,
or by filing an
amended return
on which no
research credit
is claimed, at
any time before
the expiration
of the 3-year
period beginning
on the last day
prescribed by
law for filing
the return for
the taxable year
(determined
without regard
to extensions).
The election may
be revoked
within the above-
described 3-year
period by filing
an amended
return on which
the credit is
claimed.5012(e)(4)..... 7002A(c)(3) 72(e) Election to Available for
recognize gain contracts
on exchange of entered into
life insurance after June 20,
contracts to 1988, and before
avoid the November 6,
characterization 1988, which are
of life exchanged before
insurance February 10,
contract as a 1989.
modified
endowment
contract.5031(a)........ 7520(a).......... Election to use Available in
120 percent of cases where the
the Applicable valuation date
Federal Midterm occurs on or
rate for either after May 1,
of the two 1989. The
months preceding election is made
a valuation date by attaching a
in valuing statement to the
certain last income,
interests estate, or gift
transferred to tax return filed
charity for before the due
which an income, date, or if a
estate, or gift timely return is
tax charitable not filed, the
deduction is first return
allowable. filed after the
due date. The
statement shall
contain the
following: (1) A
statement that
an election
under section
7520(a) is being
made; (2) the
transferor's
name and
taxpayer
identification
number as they
appear on the
return; (3) a
description of
the interest
being valued;
(4) the
recipients,
beneficiaries,
or donees of the
transferred
interest; (5)
the date of the
transfer; (6)
the Applicable
Federal Midterm
rate that is
used to value
the transferred
interest and the
month to which
the rate
pertains.5033(a)(2)..... 2056(d).......... Election to treat Available in the
a trust for the case of estates
benefit of a of decedents
surviving spouse dying after
who is not a November 11,
U.S. citizen as 1988. The
a Qualified election is made
Domestic Trust, by the executor
transfers to on the last
which are Federal estate
deductible under tax return filed
section 2056(a) by the executor
of the Code. before the due
date of the
return, or if a
timely return is
not filed by the
executor, on the
first estate tax
return filed by
the executor
after the due
date. However,
elections made
on or after May
5, 1991, may not
be made on any
return filed
more than one
year after the
time prescribed
for filing the
return
(including
extensions).6006(a)........ 1(i)(7).......... Election to Available for
include certain taxable years
unearned income beginning after
of a child on December 31,
the parent's 1988. The
return. election must be
made in the
manner
prescribed by
the appropriate
forms for the
parent's return
for the year for
which the
election is
effective. The
election must be
made by the due
date (taking
extensions into
account) of such
tax return.6011........... 121(d)(9)........ Election to Election may be
exclude gain on made for a sale
the sale of a or exchange
principal after September
residence by 30, 1988, by a
certain taxpayer who
incapacitated becomes
taxpayers age 55 physically or
or over. mentally
incapable of
self-care and
meets the
required use
rule provided in
section
121(d)(9) of the
Code. For the
time and manner
of making the
election see
Sec. 1.121-4
of the Income
Tax Regulations.6026(a)........ 263A(h).......... Election for Available for the
certain authors, first taxable
photographers, year ending
and artists to after November
apply the 10, 1988. An
exemption from eligible
the uniform taxpayer will be
capitalization treated as
rules for the having made the
first taxable election if the
year ending taxpayer reports
after November income and
10, 1988. expenses for the
first taxable
year ending
after November
10, 1988 in
accordance with
the exemption
from section
263A of the
Code.
6026(b)(1)..... 263A(d)(1)....... Revocation of Election for any
prior election taxable year
under section beginning before
263A(d)(3) of January 1, 1989,
the Code may be revoked
(relating to the for the first
capitalization taxable year
of certain beginning after
expenses for the December 31,
production of 1988.
animals).6026(c)........ 263A(d)(3)(B).... Election by Available without
eligible the consent of
taxpayers not to the Commissioner
have section for the first
263A of the Code taxable year
apply to costs beginning after
incurred in the December 31,
planting, 1986, during
cultivation, which the
maintenance, or taxpayer engages
development of in the planting,
pistachio trees. cultivation,
maintenance, or
development of
pistachio trees.
Consent must be
obtained from
the Commissioner
for the election
to be made for
any subsequent
taxable year.6152(a), 2056(b)(7)(C)(ii) Election to treat Available in the
6152(c)(3). a survivor case of estates
annuity payable of decedents
to a surviving dying after
spouse that is December 31,
otherwise 1981, and in no
deductible under event will the
section time for making
2056(b)(7)(C) of the election
the Code as a expire before
nondeductible November 11,
terminable 1990. [See
interest. paragraph (e) of
this section.]6152(b), 2523(f)(6)(B).... Election to treat Available in the
6152(c)(3). a joint and case of
survivor annuity transfers made
in which the after December
donee spouse has 31, 1981, and in
a survivorship no event will
interest that is the time for
otherwise making the
deductible under election expire
section before November
2523(f)(6)(A) of 11, 1990. [See
the Code as a paragraph (f) of
nondeductible this section.]
terminable
interest.6152(c)(2)..... 2056(b)(7)(C)(ii) Election to treat Available to
, 2523(f)(6)(B). as deductible estates of
for estate or decedents dying
gift tax after December
purposes under 31, 1981, or to
sections transfers made
2056(b)(7)(C) or after December
2523(f)(6) of 31, 1981, where:
(1) the estate
respectively, a or gift tax
survivor's return was filed
annuity payable prior to
to a surviving November 11,
spouse reported 1988; (2) the
on an estate or annuity was not
gift tax return deducted on the
filed prior to return as
November 11, qualified
1988, as a terminable
nondeductible interest
terminable property under
interest. sections
2056(b)(7) or
2523(f) of the
Code; and (3)
the executor or
donor elects to
treat the
interest as a
deductible
terminable
interest under
sections
2056(b)(7)(C) or
2523(f)(6) prior
to November 11,
1990. [See
paragraph (g) of
this section.]6180(b)(1)..... 142(i)(2)........ Election by a Available for
nongovernmental bonds issued
owner of a after November
highspeed 10, 1988. [See
intercity rail paragraph (h) of
facility not to this section.]
claim any
deduction under
section 167 or
168 of the Code
and any credit
under subtitle
A, in order for
the facility to
be described in
section
142(a)(11).6181(c)(2)..... 148(f)(4)(A)..... One-time election Available for
by the issuer of bonds
tax-exempt bonds outstanding as
outstanding as of November 11,
of November 11, 1988. The
1988, other than election must be
private activity made in writing
bonds, to apply on the later of
the amendments March 21, 1990,
made by section or the first
148(b) of the date any payment
Code to amounts is required
deposited after under section
such date in 148(f) of the
bona fide debt Code. The
service funds. election should
be retained as
part of the
issuer's books
and records (as
defined in Sec.
1.103-10(b)(2)(
vi) of the
regulations) of
the bond issue
to which it
relates.6277........... 382, 383......... Election by a Available for
loss corporation ownership
that otherwise changes
qualifies for described in
the exception of section
section 621(f)(5) of the
621(f)(5) of the 1986 Act, if a
1986 Act not to petition was
apply that filed with the
exception. That court before
exception August 14, 1986.
provides for the The election is
inapplicability, to be made by
in certain filing a
situations, of statement with
the amendments the District
to sections 382 Director with
and 383 of the whom the loss
Code made by the corporation
1986 Act would file its
(relating to Federal income
limitation of tax return. The
corporate statement must
attributes after identify the
an ownership election as an
change). That election under
exception section 6277 of
applies with the Act and must
respect to a (1) contain the
loss taxpayer's name,
corporation's address, and
ownership change employee
resulting from a identification
reorganization number, (2)
described in identify the
section transaction to
368(a)(1)(G) of which the
the Code or from election
an exchange of relates, (3)
debt for stock represent that
in a title 11 or the conditions
similar case if for making the
a petition was election have
filed with the been satisfied,
court before and (4) be
August 14, 1986. signed by a
person
authorized to
sign the Federal
income tax
return of the
loss
corporation.
8007(a)(1)..... 3127............. Election to be An individual
exempted from employer and an
the taxes employee, both
imposed by of whom are
sections 3101 members of a
and 3111 of the recognized
Code. religious sect
or a division
thereof
described in
section
1402(g)(1) of
the Code and
adherents of
established
tenets or
teachings of
such sect or
division, may,
if both qualify
and make
elections,
obtain
exemptions from
the taxes
imposed by
sections 3101
and 3111. [See
paragraph (i) of
this section.]------------------------------------------------------------------------
(2) Time for making elections--(i) In general. Except as otherwise provided in this section, the elections described in paragraph (a)(1) of this section must be made by the later of--
(i) In general. Except as otherwise provided in this section, the elections described in paragraph (a)(1) of this section must be made by the later of--
(A) The due date (taking into account any extensions of time to file obtained by the taxpayer) of the tax return for the first taxable year for which the election is effective, or
(B) January 22, 1990 (in which case the election generally must be made by amended return).
(ii) No extension of time for payment. Payments of tax due must be made in accordance with chapter 62 of the Code.
(3) Manner of making elections. Except as otherwise provided in this section, the elections described in paragraph (a)(1) of this section must be made by attaching a statement to the tax return for the first taxable year for which the election is to be effective. If such tax return is filed prior to the making of the election, the statement must be attached to an amended tax return of the first taxable year for which the election is to be effective. Except as otherwise provided in the return or in the instructions accompanying the return for the taxable year, the statement must--
(i) Contain the name, address and taxpayer identification number of the electing taxpayer;
(ii) Identify the election;
(iii) Indicate the section of the Code (or, if the provision is not codified, the section of the Act) under which the election is made;
(iv) Specify, as applicable, the period for which the election is being made and the property or other items to which the election is to apply; and
(v) Provide any information required by the relevant statutory provisions and any information requested in applicable forms and instructions, such as the information necessary to show that the taxpayer is entitled to make the election. Notwithstanding the foregoing, an amended return need not be filed for an election made prior to October 23, 1989, if the taxpayer made the election in a reasonable manner.
(4) Revocation--(i) Irrevocable elections. The elections described in this section that are made under the following sections of the Act are irrevocable: 1002(a)(11)(A) (Code section 168(b)(2)), 1002(a)(23)(B), 1002(l)(1)(A) (Code section 42(b)(2)(A)(ii)), 1002 (l)(2)(B) (Code section 42(f)(1)), 1005(c)(11), 1008(c)(4)(A) (Code section 460(b)(3)), 1014(c)(1), 1014(c)(2), 1014(d)(3)(B) and 1014(d)(4) (Code section 643(g)(2)), 2004(m)(5), 4004(a) (Code section 42(j)(5)(B)), 5033(a)(2) (Code section 2056A(d)), 6006(a) (Code section 1(i)(7)), 6026(a) (Code section 263A(h)), 6026(b)(1) (Code section 263A(d)(1)), 6152(a) and 6152(c)(3) (Code section 2056(b)(7)(C)(ii)), 6152(b) and 6152(c)(3) (Code section 2523(f)(6)(B)), 6152(c)(2) (Code sections 2056(b)(7)(C)(ii) and 2523(f)(6)(B)), and 6180(b)(1) (Code section 142(i)(2)).
(i) Irrevocable elections. The elections described in this section that are made under the following sections of the Act are irrevocable: 1002(a)(11)(A) (Code section 168(b)(2)), 1002(a)(23)(B), 1002(l)(1)(A) (Code section 42(b)(2)(A)(ii)), 1002 (l)(2)(B) (Code section 42(f)(1)), 1005(c)(11), 1008(c)(4)(A) (Code section 460(b)(3)), 1014(c)(1), 1014(c)(2), 1014(d)(3)(B) and 1014(d)(4) (Code section 643(g)(2)), 2004(m)(5), 4004(a) (Code section 42(j)(5)(B)), 5033(a)(2) (Code section 2056A(d)), 6006(a) (Code section 1(i)(7)), 6026(a) (Code section 263A(h)), 6026(b)(1) (Code section 263A(d)(1)), 6152(a) and 6152(c)(3) (Code section 2056(b)(7)(C)(ii)), 6152(b) and 6152(c)(3) (Code section 2523(f)(6)(B)), 6152(c)(2) (Code sections 2056(b)(7)(C)(ii) and 2523(f)(6)(B)), and 6180(b)(1) (Code section 142(i)(2)).
(ii) Elections revocable with the consent of the Commissioner. The elections described in this section that are made under the following sections of the Act are revocable only with the consent of the Commissioner: 1006(d)(15), 1006(j)(1)(C), 1006(t)(18)(B), 1009(d) (Code section 165(l)), 1010(f)(1) (Code section 831(b)(2)(A)), 1010(f)(2) (Code section 835(a)), 1012(d)(4) (Code section 865(f)), 1012(d)(6) (Code section 865(g)(3)), 1012(d)(8) (Code section 865(h)(2)), 1012(l)(2) (Code section 245(a)(10)), 1012(n)(3), 1012(bb)(4) (Code section 904(g)(10)), 2004(j)(1), 5031(a) (Code section 7520(a)), 6026(c) (Code section 263A(d)(3)(B)), and 6277.
(iii) Freely revocable elections. The election described in this section that is made under section 6011 of the Act is revocable without the consent of the Commissioner. (See section 121(c) of the Code and Sec. 1.121-4 of the regulations.)
(b) Elections with respect to the low-income housing credit. The elections under sections 42(d)(3)(B), 42(f)(1), 42(g)(3)(B)(i), 42(i)(2)(B), and 42(j)(5)(B) of the Code generally must be made for the taxable year in which the building is placed in service, or the succeeding taxable year if the section 42(f)(1) election is made to defer the start of the credit period, and must be made in the certification required to be filed pursuant to section 42(l) (1) and (2), as amended by the Act. The election under section 42(j)(5)(B) of the Code must be made by the later of the due date of the certification or January 22, 1990. The election under section 42(b)(2)(A)(ii) must be made in accordance with the requirements of Notice 89-1, 1989-2 I.R.B. 10.
(c) Election to treat certain carryovers of disallowed investment interest expense as passive activity deductions. The requirements of paragraphs (a) (2) and (3) of this section do not apply to an election under section 1005(c)(11) of the Act. Instead, the election must be made at the time and in the manner prescribed in Notice 89-36, 1989-13 I.R.B. 6. Thus, the election must be made before the filing deadline specified in Notice 89-36 by amending previously filed returns to reflect any change in the computation of tax liability that results from the election.
(d) Election with respect to the treatment of reasonably estimated losses in an insolvent or bankrupt financial institution--(1) In general. This paragraph (d) applies to an election under section 905(a) of the 1986 Act, and to an election under section 1009(d) of the Act, both relating to section 165(l) of the Code. If--
(1) In general. This paragraph (d) applies to an election under section 905(a) of the 1986 Act, and to an election under section 1009(d) of the Act, both relating to section 165(l) of the Code. If--
(i) As of the close of the taxable year, it can reasonably be estimated that there is a loss on a deposit (within the meaning of section 165(l)(4)) of a qualified individual (as defined in section 165(l)(2)) in a qualified financial institution (as defined in section 165(l)(3)), and
(ii) Such loss is on account of the bankruptcy or insolvency of such institution, then the qualified individual may elect under either section 165(l)(1) or (5) (but not both), to treat the amount (subject to the applicable limitations if under section 165(l)(5)) so estimated for that taxable year as a loss described in either section 165(c)(3), relating to casualty losses, or section 165(c)(2), relating to transactions entered into for profit, and incurred during the taxable year. The election will apply to all losses of the qualified individual on deposits in the institution with respect to which an election is made. For additional information and examples of the application of the election rules, see Notice 89-28, 1989-12 I.R.B. 72.
This paragraph (d) includes the procedural and the principal substantive rules first issued in Notice 89-28. For specific rules relating to an election under section 165(1)(5), see paragraph (d)(2) of this section.
(2) Specific rules relating to the section 165(1)(5) election--(i) Applicability. An election under section 165(1)(5) of the Code may be made only if no part of the taxpayer's deposits in the financial institution is federally insured. Generally, this requirement will be met only in cases in which none of the deposits in the financial institution are federally insured.
(i) Applicability. An election under section 165(1)(5) of the Code may be made only if no part of the taxpayer's deposits in the financial institution is federally insured. Generally, this requirement will be met only in cases in which none of the deposits in the financial institution are federally insured.
(ii) Dollar limitations. An election under section 165(1)(5) of the Code is limited to $20,000 ($10,000 in the case of a separate return by a married individual) in aggregate losses on deposits in any one financial institution. The applicable dollar limit must be reduced by the amount of any insurance proceeds that can reasonably be expected to be received under any state law.
(3) Time and manner of determining loss and making the election--(i) Year of election and determination of loss. A qualified individual may make an election under section 165(1) of the Code either for the first taxable year in which a reasonable estimate of the loss can be made or for a later taxable year that is prior to the taxable year in which the loss is sustained. The amount of the loss is determined by the difference between a taxpayer's basis in the deposits and the amount that is reasonably estimated to be recovered, taking into account all facts and circumstances reasonably available to the taxpayer as of the date the election is made. A reasonable estimate might be based, for example, on the percentage of total deposits likely to be recovered by the depositors according to a determination made by the regulatory authority or trustee having responsibility over the institution. In addition, the taxpayer's basis in the deposits must be reduced to the extent that a loss is claimed.
(i) Year of election and determination of loss. A qualified individual may make an election under section 165(1) of the Code either for the first taxable year in which a reasonable estimate of the loss can be made or for a later taxable year that is prior to the taxable year in which the loss is sustained. The amount of the loss is determined by the difference between a taxpayer's basis in the deposits and the amount that is reasonably estimated to be recovered, taking into account all facts and circumstances reasonably available to the taxpayer as of the date the election is made. A reasonable estimate might be based, for example, on the percentage of total deposits likely to be recovered by the depositors according to a determination made by the regulatory authority or trustee having responsibility over the institution. In addition, the taxpayer's basis in the deposits must be reduced to the extent that a loss is claimed.
(ii) Time and manner of making election. A qualified individual may make an election under section 165(1) of the Code on--
(A) The income tax return for the taxable year with respect to which the taxpayer made a reasonable estimate of the loss;
(B) An amended income tax return for a taxable year described in paragraph (d)(3)(ii)(A) of this section, if the period prescribed for filing a claim for refund or credit for that taxable year has not yet expired; or, if applicable,
(C) An amended income tax return for a taxable year (beginning after December 31, 1981) described in paragraph (d)(3)(ii)(A) of this section, whether or not the claim for refund or credit is barred by another provision of law, but only if the amended return is properly filed on or before November 9, 1989.
(iii) Information to include with election. The election should include any information requested in the applicable forms and instructions (e.g., Form 4684, Casualties and Thefts). If the applicable form(s) and instructions do not make reference to or request information concerning this election, the taxpayer should, on an appropriate line or space clearly indicate the name of the financial institution, include the following language: ``Insolvent Financial Institution Election,'' and include the calculation of the reasonably estimated loss claimed.
(4) Revocability of the election--(i) In general. If a taxpayer desires to revoke an election under section 165(l) of the Code, the taxpayer must request, in writing, the consent of the Secretary setting forth the pertinent facts surrounding the election and the reasons for requesting a revocation.
(i) In general. If a taxpayer desires to revoke an election under section 165(l) of the Code, the taxpayer must request, in writing, the consent of the Secretary setting forth the pertinent facts surrounding the election and the reasons for requesting a revocation.
(ii) Exception. With respect to an election made under section 165(l)(1) of the Code prior to November 9, 1989, a qualified individual may revoke such election without securing the prior consent of the Secretary but only if the taxpayer makes an election under section 165(l)(5) by November 9, 1989, in the manner prescribed in paragraph (d)(3) of this section.
(5) Effective date. Paragraph (d) of this section is generally effective for elections made under section 165(1) of the Code on or after November 10, 1988. However, an election filed prior to February 24, 1989, that is made in any reasonable manner will be effective.
(e) Election to treat a survivor annuity payable to a surviving spouse as a nondeductible terminable interest. Where the time for making the election under section 2056(b)(7)(C)(ii) of the Code to treat the survivor annuity as nondeductible otherwise expires before November 11, 1990, the election may be made before November 11, 1990, by filing with the Service Center where the original return was filed supplemental information under Sec. 20.6081-1(c) of the Estate Tax Regulations containing:
(1) A statement that the election under section 2056(b)(7)(C)(ii) of the Code is being made;
(2) The applicable revised schedules;
(3) A recomputation of the tax due; and
(4) Payment of any additional tax due.
(f) Election to treat a joint and survivor annuity in which the donee spouse has a survivor interest as a nondeductible terminable interest. Where the time for making the election under section 2523(f)(6)(B) of the Code to treat the interest as nondeductible otherwise expires before November 11, 1990, the election may be made before November 11, 1990, by filing with the appropriate Service Center an original return (or an amended return if an original return was filed) containing:
(1) A statement that the election under section 2523(f)(6)(B) is being made;
(2) A recomputation of the tax due; and
(3) Payment of any additional tax due.
(g) Election to treat survivor's annuity payable to the surviving spouse as qualified terminable interest property deductible under sections 2056(b)(7)(C) or 2523(f)(6) of the Code in the case of a return filed prior to November 11, 1988. (1) In the case of an estate tax election under section 2056(b)(7)(C) the election is made by filing with the Service Center where the estate tax return was filed supplemental information under Sec. 20.6081-1(c) of the Estate Tax Regulations (and timely claim for refund under section 6511 of the Code, if applicable) containing:
(1) In the case of an estate tax election under section 2056(b)(7)(C) the election is made by filing with the Service Center where the estate tax return was filed supplemental information under Sec. 20.6081-1(c) of the Estate Tax Regulations (and timely claim for refund under section 6511 of the Code, if applicable) containing:
(i) A statement that the election under section 6152(c)(2) of the Technical and Miscellaneous Revenue Act of 1988 is being made;
(ii) The applicable revised schedules; and
(iii) A recomputation of the estate's tax liability showing the amount of any refund due.
(2) In the case of a gift tax election under section 2523(f)(6) of the Code, the election is made by filing with the Service Center where the original return was filed an amended return (and timely claim for refund under section 6511, if applicable) containing:
(i) A statement that the election under section 6152(c)(2) of the Technical and Miscellaneous Revenue Act of 1988 is being made;
(ii) The applicable revised schedules; and
(iii) A recomputation of the gift tax liability showing the amount of any refund due.
(h) Elections with respect to certain nongovernmentally owned rail facilities--(1) In general. This paragraph applies to the election under section 6180(b)(1) of the Act (Code section 142(i)(2)) not to claim a deduction under section 167 or 168 of the Code or any credit with respect to certain bond-financed property. An electing owner that is not a governmental unit must make the election at the time the loan agreement with the issuer of the bond is executed. The election must be signed by the owner and include--
(1) In general. This paragraph applies to the election under section 6180(b)(1) of the Act (Code section 142(i)(2)) not to claim a deduction under section 167 or 168 of the Code or any credit with respect to certain bond-financed property. An electing owner that is not a governmental unit must make the election at the time the loan agreement with the issuer of the bond is executed. The election must be signed by the owner and include--
(i) A description of the property with respect to which the election is being made;
(ii) The name, address, and taxpayer identification number of the issuing authority;
(iii) The name, address, and taxpayer identification number of the electing owner; and
(iv) The date and face amount of the issue used to provide the property.
(2) Other requirements. The electing owner must provide a copy of the election to the issuing authority and to any person purchasing the facilities during the period the bonds are outstanding or within 6 years after the last bond that is part of the issue is retired. The electing owner, purchaser, and all successors in interest to the electing owner or purchaser must each retain the original election document or a copy thereof in its records until 6 years after the later of the date the last bond that is part of the issue is retired or the date such owner, purchaser or successor in interest ceases to own the facilities. The issuer must retain a copy of the election until 6 years after the date the last bond that is part of the issue is retired. In addition, while the facilities are nongovernmentally owned, any publicly recorded document with respect to the facilities must state that neither the electing owner, nor any person purchasing the facilities during the period the bonds are outstanding or within 6 years after the date the last bond that is part of the issue is retired, nor any successor in interest to the electing owner or such purchaser, may claim any deduction under section 167 or 168 of the Code or any credit with respect to the facilities.
(3) Election is binding on purchasers and successors. The election is binding at all times on any person purchasing the facilities during the period the bonds are outstanding or within 6 years after the date the last bond that is part of the issue is retired and on all successors in interest to the electing owner and such purchaser.
(i) Election under section 3127 of the Code to be exempted from the taxes imposed by sections 3111 and 3101--(1) Application for exemption. To be exempt from the taxes imposed under section 3111 and 3101 of the Code with regard to wages paid after December 31, 1988, an individual who is an employer and his or her employee must each file an application on the prescribed form with the Internal Revenue Service office designated in the instructions relating to the application for exemption.
(1) Application for exemption. To be exempt from the taxes imposed under section 3111 and 3101 of the Code with regard to wages paid after December 31, 1988, an individual who is an employer and his or her employee must each file an application on the prescribed form with the Internal Revenue Service office designated in the instructions relating to the application for exemption.
(2) Approval of application for exemption. The application for exemption by the individual employer or the employee will be approved only if:
(i) The application contains or is accompanied by the evidence described in section 1402(g)(1)(A) of the Code and a waiver described in section 1402(g)(1)(B);
(ii) The Secretary of Health and Human Services makes the findings described in section 1402(g)(1) (C), (D), and (E) with respect to the religious sect or division described in section 1402(g)(1) of which the individual employer and employee are members; and
(iii) No benefit or other payment referred to in section 1402(g)(1)(B) became payable (or, but for sections 203 or 222(b) of the Social Security Act, would have become payable) to the employee filing the application at or before the time of the filing.
(3) Effective period of exemption. The election provided in paragraph (h)(1) of this section will apply with respect to wages paid by such individual employer during the period commencing with the first day of the first calendar quarter, after the quarter in which such application is filed, throughout which such individual employer or employee meets the applicable requirements specified in paragraphs (h)(2) and (h)(3).
(4) Termination of election. The exemption granted under section 3127 of the Code will end on the last day of the calendar quarter preceding the first calendar quarter thereafter in which:
(i) Such individual employer or the employee involved ceases to meet the applicable requirements of paragraphs (h)(2) and (h)(3), or
(ii) The sect or division thereof of which such individual employer or employee is a member is found by the Secretary of Health and Human Services to have failed to meet the requirements of section 3127(b)(2).
(5) Both the individual employer and employee must qualify and elect. The exemption from the taxes imposed under sections 3101 and 3111 of the Code is applicable only if both the individual employer and the employee qualify and make the election under the provisions of section 3127.
(j) Certain elections not addressed in this section. Elections under the Act that are not addressed in this section include:
(1) An election relating to the effective date of certain source rules under section 861(a) of the Code (section 1012(g)(1) of the Act);
(2) An election relating to transitional rules for interest allocation under 864(e) of the Code (section 1012(h)(7) of the Act);
(3) An election relating to the chain deficit rules under section 952(c)(1)(C) of the Code (section 1012(i)(25) of the Act);
(4) An election relating to the definition of a passive foreign investment company in section 1296 of the Code (section 1012(p)(27) of the Act);
(5) An election by a shareholder of a qualified electing fund under section 1291(d)(2)(B) of the Code (section 1012(p)(28) of the Act);
(6) An election to be treated as a qualified electing fund under section 1295 of the Code (section 6127 of the Act);
(7) An election relating to treatment of an insurance branch as a separate corporation under section 964(d) of the Code (section 6129 of the Act);
(8) An election relating to certain regulated futures contracts and nonequity options under section 988(c)(1)(D) of the Code (section 6130(b) of the Act);
(9) An election relating to certain qualified funds under section 988(c)(1)(E) of the Code (section 6130(b) of the Act);
(10) An election under section 952(c)(1)(B) of the Code to apply section 953(a) without regard to the same country exception (section 6131(a) of the Act);
(11) An election relating to treatment of a foreign insurance company as a domestic corporation under section 953(d) of the Code (section 6135 of the Act). Guidance concerning the elections described in this paragraph (j) will generally be provided in regulations to be issued under the relevant Code sections. With respect to certain elections described in this paragraph (j), preliminary guidance has been published. See Notice 88-125, 1988-52 I.R.B. 4, for guidance with respect to the election described in paragraph (j)(6) of this section, relating to the qualified electing fund election. See Notice 88-124, 1988-51 I.R.B. 6, for guidance with respect to the elections described in paragraph (j) (8) and (9) of this section, relating to section 988(c)(1) (D) and (E) of the Code.
(k) Additional information required. Later regulations or revenue procedures issued under provisions of the Code or Act covered by this section may require the furnishing of information in addition to that which was furnished with the statement of election described in this section. In that event, the later regulations or revenue procedures will provide guidance with respect to the furnishing of additional information. [T.D. 8267, 54 FR 38980, Sept. 22, 1989; 54 FR 41243, 41364, Oct. 6, 1989. Redesignated and amended by T.D. 8435, 57 FR 43895, 43896, Sept. 23, 1992; 57 FR 47373, Oct. 15, 1992] Sec. 301.9100-9T Election by a bank holding company to forego grandfather provision for all property representing pre-June 30, 1968, activities.
(a) In general. For purposes of sections 1101 through 1103 and 6158 of the Code, a bank holding company may elect under section 1103(g) to have the determination of whether property is prohibited property or is property eligible to be distributed without recognition of gain under section 1101(b)(1) made under the Bank Holding Company Act (12 U.S.C. 1841 et seq.) as if the Act did not contain the proviso of section 4(a)(2) thereof.
(b) Manner of making election. The election under section 1103(g) shall be made in a written statement filed with the Federal Reserve Board indicating that by resolution of its board of directors, the bank holding company is electing to apply the provisions of section 1103(g). In addition, the bank holding company shall indicate on its income tax return for each taxable year in which the election applies to a distribution or sale of property (in the manner specified in the Internal Revenue Service's instructions for the preparation of the return) that it has made the election under section 1103(g). The election shall be considered to be made on the date on which the written statement is received by the Federal Reserve Board.
(c) Scope of election. The election under section 1103(g) applies to all determinations of whether property is prohibited property or is property eligible to be distributed without recognition of gain under section 1101(b)(1).
(d) Election; binding effect. An election made under section 1103(g) is irrevocable.
(e) Final certification. An election under section 1103(g) shall not apply unless the final certification referred to in section 1101(e) or section 6158(c)(2), as the case may be, includes a certification by the Federal Reserve Board that the bank holding company has disposed of either all banking property or all nonbanking property (including property described in the proviso of section 4(a)(2) of the Bank Holding Company Act).
(f) Conditional certification. A certification by the Federal Reserve Board under section 1101 (a)(1)(B), 1101 (b)(1)(B), 1101 (c)(2)(C), 1101 (c)(3)(C), or 6158(a) that is conditioned upon the bank holding company's making an election under section 1103(g) shall not be considered to be made before the distribution or sale unless the certification and the election are made before the distribution or sale. [T.D. 7570, 43 FR 52057, Nov. 8, 1978. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-10T Election by certain family-owned bank holding companies to divest all banking or nonbanking property.
(a) In general. For purposes of sections 1101 through 1103 and 6158 of the Code, a bank holding company may elect under section 1103(h) to have the determination of whether property is prohibited property or is property eligible to be distributed without recognition of gain under section 1101(b)(1) made under the Bank Holding Company Act (12 U.S.C. 1841 et seq.) as if the Act did not contain clause (ii) of section 4(c) thereof.
(b) Manner of making election. The election under section 1103(h) shall be made in a written statement filed with the Federal Reserve Board indicating that by resolution of its board of directors, the bank holding company is electing to apply, the provisions of section 1103(h). In addition, the bank holding company shall indicate on its income tax return for each taxable year in which the election applies to a distribution or sale of property (in the manner specified in the Internal Revenue Service's instructions for the preparation of the return) that it has made the election under section 1103(h). The election shall be considered to be made on the date on which the written statement is received by the Federal Reserve Board.
(c) Scope of election. The election under section 1103(h) applies to all determinations of whether property is prohibited property or is property eligible to be distributed without recognition of gain under section 1101(b)(1).
(d) Election; binding effect. An election made under section 1103(h) is irrevocable.
(e) Final certification. An election under section 1103(h) shall not apply unless the final certification referred to in section 1101(e) or section 6158(c)(2), as the case may be, includes a certification by the Federal Reserve Board that the bank holding company has disposed of either all banking property or all nonbanking property.
(f) Conditional certification. A certification by the Federal Reserve Board under section 1101 (a)(1)(B), 1101 (b)(1)(B), 1101 (c)(2)(C), 1101 (c)(3)(C), or 6158(a) that is conditioned upon the bank holding company's making an election under section 1103(h) shall note considered to be made before the distribution or sale unless the certification and the election are made before the distribution or sale. [T.D. 7570, 43 FR 52057, Nov. 8, 1978. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-11T Election by a qualified bank holding corporationto pay in installments the tax attributable to sales under theBank Holding Company Act.
(a) In general. Under section 6158(a) of the Code, a qualified bank holding corporation may elect to pay in installments the tax under chapter I of the Code attributable to the sale of bank property or prohibited property (as those terms are defined in section 6158(f) (2) and (3)) if--
(1) It meets the conditions described in paragraph (b) of this section, and
(2) It files an election in accordance with the rules set forth in paragraph (c) of this section.
(b) Conditions. (1) The sale of bank property or prohibited property must take place after July 7, 1970.
(1) The sale of bank property or prohibited property must take place after July 7, 1970.
(2) The Federal Reserve Board must certify before the sale of the bank property or prohibited property that the divestiture of such property is necessary or appropriate to effectuate section 4 or the policies of the Bank Holding Company Act (12 U.S.C. 1841 et seq.).
(3) If bank property is sold, the qualified bank holding corporation (or a corporation having control of it or a subsidiary of it) must not have--
(i) Previously elected to apply section 6158 to a sale of prohibited property, or
(ii) Previously distributed prohibited property under section 1101(a).
(4) If prohibited property is sold, the qualified bank holding corporation (or a corporation having control of it or a subsidiary of it) must not have--
(i) Previously elected to apply section 6158 to a sale of bank property, or
(ii) Previously distributed bank property under section 1101(b).
(5) The qualified bank holding corporation must not have elected to return the income from the sale under the installment provisions of section 453.
(c) Time and manner of making election. (1) Except as provided in paragraph (c)(2) of this section, a qualified bank holding corporation shall make the election under section 6158(a) by--
(1) Except as provided in paragraph (c)(2) of this section, a qualified bank holding corporation shall make the election under section 6158(a) by--
(i) Attaching a statement to its income tax return for the taxable year in which the prohibited property or bank property is sold showing the tax computation under paragraph (f) of this section and the amount of the installment paid with the return, and
(ii) Entering the amount of the installment payment followed by the words ``computed under section 6158'' in the appropriate place on the tax return.
(2) If the qualified bank holding corporation filed its income tax return for the year of sale before February 6, 1979 (without electing under section 6158(a)), then it shall make the election under section 6158(a) by attaching a statement to its claim for credit or refund (amended tax return) for its overpayment of income tax attributable to the application of section 6158 showing the tax computation under paragraph (f) of this section and entering the amount of the credit or refund followed by the words ``attributable to the application of section 6158'' in the appropriate place on the claim. In order for the election to be effective, the claim must be filed before the earlier of--
(i) The expiration of the period of limitation for the filing of the claim, or
(ii) February 6, 1979.
(d) Scope of election. An election under section 6158 will apply only to the particular sale or sales of property with respect to which the election is being made.
(e) Special rule for certifying sales. For purposes of section 6158(a) and paragraph (b)(2) of this section, in the case of a sale which takes place after July 7, 1970, and before January 1, 1977, a certification by the Federal Reserve Board shall be treated as made before the sale if application for such certification was made before January 1, 1977.
(f) Tax attributable to sales. The tax under chapter I of the Code attributable to sales with respect to which an election under section 6158 has been made shall be the amount, if any, by which the tax under chapter I on the taxable income of the qualified bank holding corporation (computed without regard to section 6158) for the taxable year during which the sales occur exceeds the greater of--
(1) The tax under chapter I for such year on the taxable income of the corporation exclusive of gains on sales of property with respect to which an election under section 6158 has been made, or
(2) The tax under chapter I for such year on the taxable income of the corporation exclusive of gains and losses on all sales of the type of property (either bank property or prohibited property) with respect to which an election under section 6158 has been made. [T.D. 7570, 43 FR 52057, Nov. 8, 1978. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-12T Various elections under the Tax Reform Act of 1976.
(a) Elections covered by temporary rules. The sections of the Internal Revenue Code of 1954, or of the Tax Reform Act of 1976, to which this section applies and under which an election or notification may be made pursuant to the procedures described in paragraphs (b) and (d) are as follows:
(1) FIRST CATEGORY----------------------------------------------------------------------------------------------------------------
Section Description of election Availability of election----------------------------------------------------------------------------------------------------------------167(o) of Code........................... Substantially rehabilitated Additions to capital account
historic property. occurring after June 30, 1976, and
before July 1, 1981.172(b)(3)(E) of Code..................... Forego of carryback period..... Any taxable year ending after
December 31, 1975.402(e)(4)(L) of Code..................... Lump sum distributions from Distributions and payments made
qualified plans. after December 31, 1975, in taxable
years beginning after such date.812(b)(3) of Code........................ Forego of carryback period by Any taxable year ending after
life insurance companies. December 31, 1975819A of Code............................. Contiguous country branches of All taxable years beginning after
domestic life insurance December 31, 1975.
companies.825(d)(2) of Code........................ Forego of carryback period by Any taxable year ending after
mutual insurance companies. December 31, 1975.911(e) of Code........................... Foregoing of benefits of All taxable years beginning after
section 911. December 31, 1975.----------------------------------------------------------------------------------------------------------------
(2) SECOND CATEGORY----------------------------------------------------------------------------------------------------------------185(d) of Code........................... Amortization of railroad All taxable years beginning after
grading and tunnel bores. December 31, 1974.1057 of Code............................. Transfer to foreign trusts etc. Any transfer of property after
October 2, 1975.----------------------------------------------------------------------------------------------------------------
(b) Time for making election or serving notice--(1) Category (1). A taxpayer may make an election under any section referred to in paragraph (a)(1) of this section for the first taxable year for which the election is required to be made or for the taxable year selected by the taxpayer when the choice of the taxable year is optional. The election must be made by the later of the time, including extensions thereof, prescribed by law for filing income tax returns for such taxable year or March 8, 1977.
(1) Category (1). A taxpayer may make an election under any section referred to in paragraph (a)(1) of this section for the first taxable year for which the election is required to be made or for the taxable year selected by the taxpayer when the choice of the taxable year is optional. The election must be made by the later of the time, including extensions thereof, prescribed by law for filing income tax returns for such taxable year or March 8, 1977.
(2) Category (2). A taxpayer may make an election under any section referred to in paragraph (a)(2) for the first taxable year for which the election is allowed or for the taxable year selected by the taxpayer when the choice of the taxable year is optional. The election must be made (i) for any taxable year ending before December 31, 1976, for which a return has been filed before January 31, 1977, by filing an amended return, provided that the period of limitation for filing claim for credit or refund of overpayment of tax, determined from the time the return was filed, has not expired or (ii) for all other years by filing the income tax return for the year for which the election is made not later than the time, including extensions thereof, prescribed by law for filing income tax returns for such year.
(c) Certain other elections. The elections described in this paragraph shall be made in the manner and within the time prescribed herein and in paragraph (d) of this section.
(1) The following elections under the Tax Reform Act of 1976 shall be made:
(i) Section 207(c)(3) of Act; change from static value method of accounting; all taxable years beginning after December 31, 1976. by filing Form 3115 with the National Office of the Internal Revenue Service before October 5, 1977.
(ii) Section 604 of Act; travel expenses of State legislators; all taxable years beginning before January 1, 1976. by filing an amended return for any taxable year for which the period for assessing or collecting a deficiency has not expired before October 4, 1976, by the last day for filing a claim for refund or credit for the taxable year but in no event shall such day be earlier than October 4, 1977.
(iii) Section 804(e)(2) of Act; retroactive applications of amendments to property described in section 50(a) of Code; certain taxable years beginning before January 1, 1975. by filing amended returns before October 5, 1977, for all taxable years to which applicable for which the period of limitation for filing claim for credit or refund for overpayment of tax has not expired.
(iv) Section 1608(d)(2) of Act; election as a result of determination as defined in section 859(c) of the Code; determinations made after October 4, 1976. by filing a statement with the district director for the district in which the taxpayer maintains its principal place of business within 60 days after such determination.
(v) Section 2103 of Act; treatment of certain 1972 disaster losses. Any taxable year in which payment is received or indebtedness is foregiven. by filing a return for the taxable year or an amended return by the last day for making a claim for credit or refund for the taxable year but in no event shall such day be earlier than October 4, 1977.
(2) [Reserved]
(3) The election provided for in section 167(e)(3) of the Code shall be made in accordance with Sec. 1.167(e)-1(d) except that the election shall be applicable for the first taxable year of the taxpayer beginning after December 31, 1975.
(d) Manner of making election. Unless otherwise provided in the return or in a form accompanying a return for the taxable year, the elections described in paragraphs (a) and (c) (except paragraphs (c)(1)(i), and (c)(5)) shall be made by a statement attached to the return (or amended return) for the taxable year. The statement required when making an election pursuant to this section shall indicate the section under which the election is being made and shall set forth information to identify the election, the period for which it applies, and the taxpayer's basis or entitlement for making the election.
(e) Effect of election--(1) Consent to revoke required. Except where otherwise provided by statute or except as provided in subparagraph (2) of this paragraph, an election to which this section applies made in accordance with this section shall be binding unless consent to revoke the election is obtained from the Commissioner. An application for consent to revoke the election will not be accepted before the promulgation of the permanent regulations relating to the section of the Code or Act under which the election is made. Such regulations will provide a reasonable period of time within which taxpayers will be permitted to apply for consent to revoke the election.
(1) Consent to revoke required. Except where otherwise provided by statute or except as provided in subparagraph (2) of this paragraph, an election to which this section applies made in accordance with this section shall be binding unless consent to revoke the election is obtained from the Commissioner. An application for consent to revoke the election will not be accepted before the promulgation of the permanent regulations relating to the section of the Code or Act under which the election is made. Such regulations will provide a reasonable period of time within which taxpayers will be permitted to apply for consent to revoke the election.
(2) Revocation without consent. An election to which this section applies, made in accordance with this section, may be revoked without the consent of the Commissioner not later than 90 days after the permanent regulations relating to the section of the Code or Act under which the election is made are filed with the Office of the Federal Register, provided such regulations grant taxpayers blanket permission to revoke that election within such time without the consent of the Commissioner. Such blanket permission to revoke an election will be provided by the permanent regulations in the event of a determination by the Secretary or his delegate that such regulations contain provisions that may not reasonably have been anticipated by taxpayers at the time of making such election.
(f) Furnishing of supplementary information required. If the permanent regulations which are issued under the section of the Code or Act referred to in this section to which the election relates require the furnishing of information in addition to that which was furnished with the statement of election filed pursuant to paragraph (d) of this section, the taxpayer must furnish such additional information in a statement addressed to the district director, or the director of the regional service center, with whom the election was filed. This statement must clearly identify the election and the taxable year for which it was made. If such information is not provided the election may, at the discretion of the Commissioner, be held invalid. (Sec. 191(b), Internal Revenue Code of 1954 (90 Stat. 1916, 26 U.S.C. 191(b)) [T.D. 7459, 42 FR 1469, Jan. 7, 1977]
Editorial Note: For Federal Register citations affecting Sec. 301.9100-12T, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.fdsys.gov. Sec. 301.9100-14T Individual's election to terminate taxable year when case commences.
(a) Scope. The regulations prescribed in this section provide rules for making the election under section 1398(d)(2) to terminate the taxable year of an individual taxpayer.
(b) Availability of election. This election is available to an individual taxpayer in a case commenced after March 24, 1981, under chapter 7 (relating to liquidations) or chapter 11 (relating to reorganizations) of title 11 of the United States Code. If the case is dismissed, the taxpayer cannot make the election, and an election previously made will be void. For purposes of this section, a partnership is not treated as an individual. If the taxpayer making the election is married (within the meaning of section 143), the election is available to the taxpayer's spouse, but only if the spouse is eligible to file, and does file, a joint return with the taxpayer for the taxable year ended as a result of the election.
(c) Effect of election. The election terminates the taxable year of the taxpayer (and of a spouse who joins in the election) on the day before the commencement date of the case. A new taxable year begins on the commencement date and (unless terminated earlier) ends on the date on which the taxpayer's taxable year in which the case commenced would have ended if the election had not been made.
(d) Time and manner. A taxpayer to whom the election is available makes the election by filing a return for the short taxable year ending the day before commencement of the case (the ``first short taxable year'') on or before the 15th day of the fourth full month following the end of that first short taxable year. The spouse of such a taxpayer makes the election by making a joint return with the taxpayer for that first short taxable year within the time prescribed in the preceding sentence. To facilitate processing, the taxpayer should write ``Section 1398 Election'' at the top of the return. A taxpayer may also make the election by attaching a statement of election to an application for extension of time for filing a return that satisfies the requirements under section 6081 for the first short taxable year. The application for extension must be submitted under section 6081 on or before the due date of the return for the first short taxable year. The statement must state that the taxpayer elects under section 1398(d)(2) to close his or her taxable year as of the day before commencement of the case. If the taxpayer's spouse elects to close his or her taxable year, the spouse must join in the application for extension and in the statement of election. If a joint return is not filed for the first short taxable year, the election of the spouse made with the application is void.
(e) Irrevocability of election. The election is irrevocable.
(f) Subsequent bankruptcy case of debtor's spouse. If a case under chapter 7 or chapter 11 of title 11 of the United States Code commences with respect to the spouse of a debtor to whom an election under this section was available, the spouse can make an election under this section even if the spouse's case commences in the same taxable year in which the debtor's case commences. The spouse can make the election whether or not the spouse previously joined in the debtor's election. If the spouse joined in the debtor's election, or if the debtor did not make the election, the debtor may join in the spouse's election, assuming the debtor is otherwise eligible to file a joint return with the spouse.
(g) Examples.
(1) Assume that husband and wife are calendar-year taxpayers, that a bankruptcy case involving only the husband commences on March 1, 1982, and that a bankruptcy case involving only the wife commences on October 10, 1982.
(2) If the husband does not make an election, his taxable year would not be affected; i.e., it does not terminate on February 28. If the husband does make an election, his first short taxable year would be January 1 through February 28; his second short taxable year would begin March 1. The tax return for his first short taxable year would be due on June 15. The wife could join in the husband's election, but only if they file a joint return for the taxable year January 1 through February 28.
(3) The wife could elect to terminate her taxable year on October 9. If she did, and if the husband had not made an election or if the wife had not joined in the husband's election, she would have two taxable years in 1982--the first from January 1 through October 9, and the second from October 10 through December 31. The tax return for her first short taxable year would be due on February 15, 1983. If the husband had not made an election to terminate his taxable year on February 28, the husband could join in an election by his wife, but only if they file a joint return for the taxable year January 1 through October 9. If the husband had made an election but the wife had not joined in the husband's election, the husband could not join in an election by the wife to terminate her taxable year on October 9, since they could not file a joint return for such year.
(4) If the wife makes the election relating to her own bankruptcy case, and had joined the husband in making an election relating to his case, she would have two additional taxable years with respect to her 1982 income and deductions--the second short taxable year would be March 1 through October 9, and the third short taxable year would be October 10 through December 31. The husband could join in the wife's election if they file a joint return for the second short taxable year. If the husband joins in the wife's election, they could file joint returns for the short taxable year ending December 31, but would not be required to do so. [T.D. 7775, 46 FR 25292, May 6, 1981; 46 FR 30495, June 9, 1981. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-15T Election to use retroactive effective date.
(a) Scope. The regulations prescribed in this section provide rules for making the election to use a retroactive effective date under section 7(f) of the Bankruptcy Tax Act of 1980.
(b) Availability of election. The election is available to the debtor (or debtors) in a case under title 11 of the United States Code (or a receivership, foreclosure, or similar proceeding in a Federal or State court) that commences after September 30, 1979, and before January 1, 1981. The court must approve the election. For purposes of this paragraph (b), a receivership, foreclosure, or similar proceeding before a Federal or State agency involving a financial institution to which section 585 or 593 applies shall be treated as a proceeding before a court.
(c) Effect of election--(1) In general. An election under this section changes the effective date of certain amendments to the Code made by the Bankruptcy Tax Act of 1980. The amendments affected by an election under this section are listed in paragraph (c) (2) and (3) of this section. If the election is made, all of the amendments listed in paragraph (c) (2) and (3) of this section apply to all transactions in the case (or similar proceeding) and to all parties in respect of all transactions in the case (or similar proceeding). Thus, the debtor may not elect to have only certain of the amendments apply to transactions in the case (or similar proceeding) and may not elect to have the amendments apply only to certain transactions in the case (or similar proceeding). An election under this section will not make the amendments listed in paragraph (c) (2) and (3) applicable to transactions occurring prior to commencement of the case (or similar proceeding) or transactions not in the case (or similar proceeding).
(1) In general. An election under this section changes the effective date of certain amendments to the Code made by the Bankruptcy Tax Act of 1980. The amendments affected by an election under this section are listed in paragraph (c) (2) and (3) of this section. If the election is made, all of the amendments listed in paragraph (c) (2) and (3) of this section apply to all transactions in the case (or similar proceeding) and to all parties in respect of all transactions in the case (or similar proceeding). Thus, the debtor may not elect to have only certain of the amendments apply to transactions in the case (or similar proceeding) and may not elect to have the amendments apply only to certain transactions in the case (or similar proceeding). An election under this section will not make the amendments listed in paragraph (c) (2) and (3) applicable to transactions occurring prior to commencement of the case (or similar proceeding) or transactions not in the case (or similar proceeding).
(2) Amendments affected. An election under this section changes the effective date of the amendments to the following sections:
(i) 111, relating to recovery of bad debts, prior taxes, and delinquency amounts,
(ii) 302, relating to the repeal of special treatment for certain railroad redemptions,
(iii) 312, relating to the effect of debt discharge on earnings and profits,
(iv) 337, relating to the application of the 12-month liquidation rule,
(v) 351, relating to certain transfers to controlled corporations,
(vi) 354 (other than the amendment made by section 6(i)(2) of the Bankruptcy Tax Act of 1980), 355, 357, 368, and 381, relating to corporate reorganizations,
(vii) 382, relating to special limitations on net operating loss carryover,
(viii) 542, relating to the personal holding company tax, and
(ix) 703, relating to elections of partnerships.
(3) Other amendments affected in part. Subject to the transitional rule of section 7(a)(2) of the Bankruptcy Tax Act of 1980, an election under this section changes the effective date of the amendments to sections 108 and 1017, relating to the tax treatment of discharge of indebtedness.
(4) Substitution of effective dates. The election under this section changes the effective date of the amendments listed in paragraph (c) (2) and (3) of this section by substituting ``September 30, 1979'' for ``December 31 1980'' wherever it appears in section 7(a), (c), and (d) of the Bankruptcy Tax Act of 1980.
(d) Time and manner--(1) Time and place. A debtor makes the election under this section by filing the written statement and evidence of court approval required under paragraph (d) (2) and (3) of this section on or before November 2, 1981, with the District Director or the Director of the Internal Revenue Service Center with whom an income tax return for the debtor would be filed if it were due on the date the election is filed. The election shall be considered to be made on the date on which the written statement and evidence of court approval is filed. The debtor should attach a copy of the statement and evidence of court approval to the next income tax return filed on or after the date the election is made.
(1) Time and place. A debtor makes the election under this section by filing the written statement and evidence of court approval required under paragraph (d) (2) and (3) of this section on or before November 2, 1981, with the District Director or the Director of the Internal Revenue Service Center with whom an income tax return for the debtor would be filed if it were due on the date the election is filed. The election shall be considered to be made on the date on which the written statement and evidence of court approval is filed. The debtor should attach a copy of the statement and evidence of court approval to the next income tax return filed on or after the date the election is made.
(2) Statement. The written statement must be signed by the debtor (or a person duly authorized to sign the income tax return of the debtor) and must contain the following:
(i) The name, address, and taxpayer identification number of the debtor,
(ii) A statement that the debtor is making the election under section 7(f) of the Bankruptcy Tax Act of 1980, and
(iii) Information (including the date of commencement) sufficient to identify the bankruptcy case or similar proceeding.
(3) Evidence of court approval. The evidence of court approval (or of approval of an agency in certain proceedings described in paragraph (b) of this section) must be a copy of an order or other document properly signed by the judge or other presiding officer. In addition to information identifying the debtor and the case or proceeding over which the officer presides, the order or other document must state that the court (or agency, as the case may be) approves the election of the debtor under section 7(f) of the Bankruptcy Tax Act of 1980.
(e) Revocability. An election under this section may be revoked only with the consent of the Commissioner. A request for revocation can be made only with approval of the court (or agency). [T.D. 7775, 46 FR 25292, May 6, 1981. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-16T Election to accrue vacation pay.
(a) In general. Section 463 provides that taxpayers whose taxable income is computed under an accrual method of accounting may elect without the consent of the Commissioner, to deduct certain amounts with respect to vacation pay which, because of contingencies, would not otherwise be deductible. Such election must apply to the liability for all vacation pay accounts maintained by the taxpayer within a single trade or business if the liability is contingent when vacation pay is earned.
(b) Time for making election. (1) In the case of a taxpayer who established or maintained a vacation pay account pursuant to I.T. 3956 and who continued to maintain such account pursuant to section 97 of the Technical Amendments Act of 1958, as amended, for its last taxable year ending before January 1, 1973, the election must be made for each trade or business for which such account was maintained on or before the later of (i) July 21, 1975, or (ii) the due date for filing the income tax return (determined with regard to any extensions of time granted the taxpayer for filing such return) for the first taxable year beginning after December 31, 1973. The election pursuant to this paragraph shall be effective with respect to an account described in this paragraph (b)(1) for taxable years ending after December 31, 1972. Failure to file such election shall constitute a change in the method of accounting for vacation pay for the first taxable year ending after December 31, 1972. Such change in accounting method will be considered a change initiated by the taxpayer.
(1) In the case of a taxpayer who established or maintained a vacation pay account pursuant to I.T. 3956 and who continued to maintain such account pursuant to section 97 of the Technical Amendments Act of 1958, as amended, for its last taxable year ending before January 1, 1973, the election must be made for each trade or business for which such account was maintained on or before the later of (i) July 21, 1975, or (ii) the due date for filing the income tax return (determined with regard to any extensions of time granted the taxpayer for filing such return) for the first taxable year beginning after December 31, 1973. The election pursuant to this paragraph shall be effective with respect to an account described in this paragraph (b)(1) for taxable years ending after December 31, 1972. Failure to file such election shall constitute a change in the method of accounting for vacation pay for the first taxable year ending after December 31, 1972. Such change in accounting method will be considered a change initiated by the taxpayer.
(2) In the case of a trade or business of a taxpayer to which paragraph (b)(1) does not apply, the election provided for in this section may be made for any taxable year beginning after December 31, 1973, by making the election not later than (i) July 21, 1975, or (ii) the due date for filing the income tax return (determined with regard to any extensions of time granted the taxpayer for filing such return) for the first taxable year for which the election is made.
(3) A taxpayer who elects under section 463 to treat vacation pay as provided in this section and who wishes to revoke such election may only do so with the consent of the Commissioner. Such revocation shall constitute a change in the method of accounting.
(c) Manner of making election. (1) Except as otherwise provided in paragraph (c)(2) of this section, the election provided for in this section must be made by means of a statement attached to a timely filed income tax return. The statement shall indicate that the taxpayer is electing to apply the provisions of section 463, and shall contain the following information:
(1) Except as otherwise provided in paragraph (c)(2) of this section, the election provided for in this section must be made by means of a statement attached to a timely filed income tax return. The statement shall indicate that the taxpayer is electing to apply the provisions of section 463, and shall contain the following information:
(i) The taxpayer's name and a description of each vacation pay plan to which the election is to apply.
(ii) A schedule with appropriate explanations showing--
(A) In the case of a vacation pay account established or maintained pursuant to I.T. 3956 and section 97 of the Technical Amendments Act of 1958, as amended,
(1) The balance of each such vacation pay account maintained by the taxpayer, and
(2) The amount, determined as if the taxpayer had maintained a vacation pay account for the last taxable year ending before January 1, 1973, representing the taxpayer's liability for vacation pay earned by employees, before the close of the taxable year and payable during such taxable year or within 12 months following the close of such taxable year.
(B) In the case of other vacation pay accounts, the amount of the closing balances the taxpayer would have had for the taxpayer's 3 taxable years immediately preceding the taxable year for which the election was made, had the taxpayer maintained an account representing the taxpayer's liability for vacation pay earned by the employees before the close of the taxable year and payable during the taxable year or within 12 months following the close of the taxable year throughout the 3 immediately preceding taxable years.
(iii) The amounts accrued and deducted for prior years for vacation pay but not paid at the close of the taxable year preceding the year for which the election is made.
(2) Where a taxpayer has filed its return for a taxable year beginning after December 31, 1973 prior to July 21, 1975, and has not made the election pursuant to this section, the election may be made by filing an amended return (showing adjustments, in any) for such year and attaching the statement required by paragraph (c)(1) of this section on or before July 21, 1975.
(d) The time for making the election may be illustrated by the following examples:
Example (1). X, whose taxable year begins on February 1, files, its return based on the accrual method of accounting. X has continuously accrued and deducted for income tax purposes contingent amounts of vacation pay, pursuant to I.T. 3956. Pursuant to section 463 and these regulations, in order for X to continue accruing and deducting its vacation pay amounts, X must elect to account for vacation pay under section 463 by attaching the election to its timely filed return for its taxable year ending on January 31, 1975, or if X has already filed such return by July 21, 1975, without such election, by filing the election statement with an amended return by July 21, 1975. If X does not make the election under section 463, X will be treated as having initiated a change in its method of accounting for vacation pay in its taxable year ending on January 31, 1973.
Example (2). Y, a calendar year taxpayer files its returns based on the accrual method of accounting. Y deducted its vacation pay amounts only when paid since such amounts were contingent when earned and Y was not entitled to the benefits of I.T. 3956, Y may elect for its taxable year ending on December 31, 1974, to deduct certain amounts with respect to contingent vacation pay which were not otherwise deductible, by filing an election pursuant to these regulations with its timely filed income tax return for such year or if such return was already filed by [insert date 90 days after publication of this document as a Treasury decision], without such election, by filing the election with an amended return filed by July 21, 1975. If Y does not make the election for its taxable year ending on December 31, 1974, Y may make the election with respect to any subsequent taxable year by filing an election with its return for such year. [T.D. 7353, 40 FR 17554, Apr. 21, 1975; 40 FR 25590, June 17, 1975. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-17T Procedure applicable to certain elections.
(a) Elections covered by temporary rules. The sections of the Internal Revenue Code of 1954, or of the Tax Reform Act of 1969, to which paragraph (b) of this section applies and under which an election or notification may be made pursuant to the procedures prescribed in such paragraph are as follows: ----------------------------------------------------------------------------------------------------------------
(1) First category:
231(d)(2) of Act...................... Moving expenses................. Expenses paid or incurred before
July 1, 1970, if employee was
notified of move by employer on or
before Dec. 19, 1969.
503(c)(2) of Act...................... Carved-out mineral production All mineral production payments
payments. carved out of mineral properties
after beginning of last taxable
year ending before Aug. 7, 1969.
516(d)(3) of Act...................... Contingent payments by Payments made in taxable years
transferee of franchise, ending after Dec. 31, 1969, and
trademark, or trade name. beginning before Jan. 1, 1980, on
transfers made before Jan. 1, 1970.
642(c)(1) of Code..................... Charitable contributions of Amounts paid in any taxable year
estates or trusts paid in beginning after Dec. 31, 1969.
following year.
1251(b)(4) of Code.................... No additions to excess Any taxable year beginning after
deductions account of taxpayers Dec. 31, 1969.
electing to compute taxable
income from farming in certain
manner.(2) Second category:
184(b) of Code........................ Amortization of qualified Any taxable year beginning after
railroad rolling stock. Dec. 31, 1969, in which rolling
stock was placed in service (or
succeeding taxable year).(3) Third category:
504(d)(2) of Act...................... Notification not to have sec. Exploration expenditures paid or
615(e) election treated as a incurred after Dec. 31, 1969.
sec. 617(a) election.----------------------------------------------------------------------------------------------------------------
(b) Manner of making election or serving notice--(1) In general. (i) Except as provided in subparagraph (2) of this paragraph, a taxpayer may make an election under any section referred to in paragraph (a) (1) or (2) of this section for the first taxable year for which the election is required to be made or for the taxable year selected by the taxpayer when the choice of a taxable year is optional. The election must be made not later than (a) the time, including extensions thereof, prescribed by law for filing the income tax return for such taxable year or (b) 90 days after the date on which the regulations in this section are filed with the Office of the Federal Register, whichever is later.
(1) In general. (i) Except as provided in subparagraph (2) of this paragraph, a taxpayer may make an election under any section referred to in paragraph (a) (1) or (2) of this section for the first taxable year for which the election is required to be made or for the taxable year selected by the taxpayer when the choice of a taxable year is optional. The election must be made not later than (a) the time, including extensions thereof, prescribed by law for filing the income tax return for such taxable year or (b) 90 days after the date on which the regulations in this section are filed with the Office of the Federal Register, whichever is later.
(i) Except as provided in subparagraph (2) of this paragraph, a taxpayer may make an election under any section referred to in paragraph (a) (1) or (2) of this section for the first taxable year for which the election is required to be made or for the taxable year selected by the taxpayer when the choice of a taxable year is optional. The election must be made not later than (a) the time, including extensions thereof, prescribed by law for filing the income tax return for such taxable year or (b) 90 days after the date on which the regulations in this section are filed with the Office of the Federal Register, whichever is later.
(ii) The election shall be made by a statement attached to the return (or an amended return) for the taxable year, indicating the section under which the election is being made and setting forth information to identify the election, the period for which it applies, and the facility, property, or amounts to which it applies.
(2) Additional time for certain elections. An election under section 503(c)(2) of the Act or section 642(c)(1) of the Code must be made in accordance with subparagraph (1) of this paragraph but not later than (i) the time, including extensions thereof, prescribed by law for filing the income tax return for the taxable year following the taxable year for which the election is made or (ii) 90 days after the date on which the regulations in this section are filed with the Office of the Federal Register, whichever is later.
(3) Notification as to section 615(e) election. (i) The notification referred to in paragraph (a)(3) of this section in respect of an election under section 615(e) which was made before the date on which the regulations in this section are filed with the Office of the Federal Register shall be made in a statement attached to the taxpayer's income tax return for the first taxable year in which expenditures are paid or incurred after December 31, 1969, which would be deductible by the taxpayer under section 617 if he so elects. The statement shall indicate the first taxable year for which such election was effective and the district director, or the director of the regional service center, with whom the election was filed.
(i) The notification referred to in paragraph (a)(3) of this section in respect of an election under section 615(e) which was made before the date on which the regulations in this section are filed with the Office of the Federal Register shall be made in a statement attached to the taxpayer's income tax return for the first taxable year in which expenditures are paid or incurred after December 31, 1969, which would be deductible by the taxpayer under section 617 if he so elects. The statement shall indicate the first taxable year for which such election was effective and the district director, or the director of the regional service center, with whom the election was filed.
(ii) The notification referred to in paragraph (a)(3) of this section, in respect of an election under section 615(e) which is made on or after the date on which the regulations in this section are filed with the Office of the Federal Register, shall be made in the statement of election required by paragraph (a)(2) of Sec. 15.1-1 of this chapter (Temporary Income Tax Regulations Relating to Exploration Expenditures in the Case of Mining).
(iii) The serving of notice pursuant to this subparagraph shall not preclude the subsequent making of an election under section 617(a). A failure to serve notice pursuant to this subparagraph shall be treated as an election under section 617(a) and paragraph (a)(1) of Sec. 15.1-1 of this chapter with respect to exploration expenditures paid or incurred after December 31, 1969, whether or not the taxpayer subsequently revokes his election under section 615(e) with respect to exploration expenditures paid or incurred before January 1, 1970.
(iv) For rules relating to the revocation of an election under section 615(e), including such an election which is treated pursuant to this subparagraph as an election under section 617(a), see paragraph (a) of Sec. 15.1-2 of this chapter (T.D. 6907, C.B. 1967-1, 531, 535).
(c) Effect of election--(1) Revocations--(i) Consent to revoke required. Except as provided in subdivision (ii) of this subparagraph, an election made in accordance with paragraph (b)(1) of this section shall be binding unless consent to revoke the election is obtained from the Commissioner. An application for consent to revoke the election will not be accepted before the promulgation of the permanent regulations relating to the section of the Code or Act under which the election is made. Such regulations will provide a reasonable period of time within which taxpayers will be permitted to apply for consent to revoke the election.
(1) Revocations--(i) Consent to revoke required. Except as provided in subdivision (ii) of this subparagraph, an election made in accordance with paragraph (b)(1) of this section shall be binding unless consent to revoke the election is obtained from the Commissioner. An application for consent to revoke the election will not be accepted before the promulgation of the permanent regulations relating to the section of the Code or Act under which the election is made. Such regulations will provide a reasonable period of time within which taxpayers will be permitted to apply for consent to revoke the election.
(i) Consent to revoke required. Except as provided in subdivision (ii) of this subparagraph, an election made in accordance with paragraph (b)(1) of this section shall be binding unless consent to revoke the election is obtained from the Commissioner. An application for consent to revoke the election will not be accepted before the promulgation of the permanent regulations relating to the section of the Code or Act under which the election is made. Such regulations will provide a reasonable period of time within which taxpayers will be permitted to apply for consent to revoke the election.
(ii) Revocation without consent. An election made in accordance with paragraph (b)(1) of this section may be revoked without the consent of the Commissioner not later than 90 days after the permanent regulations relating to the section of the Code or Act under which the election is made are filed with the Office of the Federal Register, provided such regulations grant taxpayers blanket permission to revoke that election within such time without the consent of the Commissioner. Such blanket permission to revoke an election will be provided by the permanent regulations in the event of a determination by the Secretary or his delegate that such regulations contain provisions that may not reasonably have been anticipated by taxpayers at the time of making such election.
(iii) Election treated as tentative. Until the expiration of the reasonable period referred to in subdivision (i) of this subparagraph or the 90-day period referred to in subdivision (ii) of this subparagraph, an election under section 433(d)(2) of the Act will be considered a tentative election, subject to revocation under the provisions of such subdivisions.
(iv) Place for filing revocations. A revocation under subdivision (i) or (ii) of this subparagraph shall be made by filing a statement to that effect with the district director, or the director of the regional service center, with whom the election was filed.
(2) Termination without consent. An election which is made in accordance with paragraph (b)(1) of this section under a section referred to in paragraph (a)(2) of this section and is not revoked pursuant to subparagraph (1) of this paragraph may, without the consent of the Commissioner, be terminated at any time after making the election by filing a statement to that effect with the district director, or the director of the regional service center, with whom the election was filed. This statement giving notice of termination must be filed before the beginning of the month specified in the statement for which the termination is to be effective. If pursuant to this subparagraph the taxpayer terminates an election made under any such section, he may not thereafter make a new election under that section with respect to the facility, property, or equipment to which the termination relates.
(d) Furnishing of supplementary information required. If the permanent regulations which are issued under the section of the Code or Act referred to in paragraph (a) (1) or (2) of this section to which the election relates require the furnishing of information in addition to that which was furnished with the statement of election filed pursuant to paragraph (b)(1) of this section, the taxpayer must furnish such additional information in a statement addressed to the district director, or the director of the regional service center, with whom the election was filed. This statement must clearly identify the election and the taxable year for which it was made.
(e) Other elections. Elections under the following sections of the Code may not be made pursuant to paragraph (b)(1) of this section but are to be made under regulations, whether temporary or permanent, which will be issued under amendments made by the Act. If necessary, such regulations will provide a reasonable period of time within which taxpayers will be permitted to make elections under these sections for taxable years ending before the date on which such regulations are filed with the Office of the Federal Register: ------------------------------------------------------------------------
Section Description------------------------------------------------------------------------167(k)(1)......................... Expenditures to rehabilitate low-
income rental housing.167(l)(4)......................... Post-1969 property of certain
utilities representing growth in
capacity.170(b)(1)(D)(iii)................. Special limitation with respect to
contributions of certain capital
gain property.453(c)............................ Revocation of election to report
income on installment basis.507(b)(1)(B)(ii).................. Notice of termination of private
foundation status.1564(a)(2)........................ Allowance of certain amounts to
component member of controlled
group of corporations.4942(h)(2)........................ Deficient distributions of private
foundations for prior taxable
years.4943(c)(4)(E)..................... Determination of holdings of a
private foundation in a business
enterprise where substantial
contributors hold more than 15
percent of voting stock.------------------------------------------------------------------------
(f) Cross reference. For temporary regulations under sections 57(c) and 163(d)(7) of the code, relating to elections with respect to net leases of real property, see Sec. 12.8 of the regulations in this part (Temporary Income Tax Regulations Under the Revenue Act of 1971). (83 Stat. 487, 85 Stat. 522, 523; 26 U.S.C. 1 nt., 57(c)(4), 163(d)(7)) [T.D. 7032, 35 FR 4330, Mar. 11, 1970]
Editorial Note: For Federal Register citations affecting Sec. 301.9100-17T, see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at www.fdsys.gov. Sec. 301.9100-18T Election to include in gross income in year of transfer.
(a) In general. Under section 83(b) of the Internal Revenue Code of 1954 any person who performs services in connection with which property is transferred which at the time of transfer is not transferable by the transferee and is subject to a substantial risk of forfeiture may elect to include in his gross income for the taxable year in which such property is transferred, the excess of the fair market value of such property at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) over the amount (if any) paid for such property. If this election is made section 33(a) does not apply with respect to such property, and any subsequent appreciation in the value of the property is not taxable as compensation. However, if the property is later forfeited, no deduction is allowed to any person with respect to such forfeiture. This election is not necessary in the case of property which is transferred subject only to a restriction which by its terms will never lapse.
(b) Manner of making election. The election referred to in paragraph (a) of this section is made by filing two copies of a written statement with the internal revenue officer with whom the person who performed the services files his return.
(c) Additional copies. The person who performed the services shall also submit a copy of the statement referred to in paragraph (b) of this section to the person for whom the services are performed, and, in addition, if the person who performs the services in connection with which restricted property is transferred and the transferee of such property are not the same person, the person who performs the services shall submit a copy of such statement to the transferee of the property.
(d) Content of statement. The statement shall indicate that it is being made under section 83(b) of the Code, and shall contain the following information:
(1) The name, address, taxpayer identification number and the taxable year (For example, ``Calendar year 1969'' or ``Fiscal year ending May 31, 1970'') of the person who performed the services;
(2) A description of each property with respect to which the election is being made;
(3) The date or dates on which the property is transferred;
(4) The nature of the restriction or restrictions to which the property is subject;
(5) The fair market value at the time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse) of each property with respect to which the election is being made; and
(6) The amount (if any) paid for such property.
(e) Time for making election. The statement referred to in paragraph (b) of this section shall be filed not later than 30 days after the date the property was transferred (or, if later, January 29, 1970). Any statement filed before February 15, 1970, may be amended not later than 30 days after the publication of this Treasury decision in the Federal Register in order to make it conform to the requirements of paragraph (d) of this section (January 17, 1970).
(f) Revocability of election. An election under section 83(b) may not be revoked except with the consent of the Commissioner. [T.D. 7021, 35 FR 626, Jan. 17, 1970; 35 FR 889, Jan. 22, 1970. Redesignated by T.D. 8435, 57 FR 43895, Sept. 23, 1992] Sec. 301.9100-19T Election relating to passive investment incomeof electing small business corporations.
(a) In general. Section 3(a) of the Act of April 14, 1966 (Pub. L. 89-389) amends section 1372(e)(5) of the Internal Revenue Code of 1954 (relating to passive investment income of electing small business corporations). This amendment, which applies to taxable years of electing small business corporations ending after April 14, 1966, provides, in general, that an election of a small business corporation under section 1372(a) of the Code shall not terminate for a taxable year of the corporation in which it has gross receipts more than 20 percent of which is passive investment income, if--
(1) Such taxable year is the first taxable year in which the corporation commenced the active conduct of any trade or business or the next succeeding taxable year; and
(2) The amount of passive investment income for such taxable year is less than $3,000. Section 3(b) of the Act of April 14, 1966, provides that the amendment made by section 3(a) thereof shall also apply to taxable years of a corporation beginning after December 31, 1962, and ending before April 15, 1966, if the corporation elects to have the amendment apply to such years, and all persons (or their personal representatives) who were shareholders of such corporation at any time during any of such years consent to such election and the application of the amendment. This section prescribes the time for, and manner of, making such election and consents, and also extends the time within which certain new shareholders may consent to an election under section 1372(a) of the Code.
(b) Application of amendment to taxable years beginning after December 31, 1962, and ending before April 15, 1966--(1) In general. An election by a corporation under section 1372(a) of the Code shall not be treated as terminated under section 1372(e)(5) of the Code for any taxable year of the corporation beginning after December 31, 1962, and ending before April 15, 1966, if--
(1) In general. An election by a corporation under section 1372(a) of the Code shall not be treated as terminated under section 1372(e)(5) of the Code for any taxable year of the corporation beginning after December 31, 1962, and ending before April 15, 1966, if--
(i) Such taxable year is the first taxable year in which the corporation commenced the active conduct of any trade or business, or the next succeeding taxable year;
(ii) The amount of passive investment income for such taxable year is less than $3,000;
(iii) The corporation makes an election, within such time and in such manner as provided in subparagraph (2) of this paragraph; and
(iv) All persons (or their personal representatives) who were shareholders of the corporation at any time during any taxable year of the corporation beginning after December 31, 1962, and ending before April 15, 1966, consent to such election, within such time and in such manner as provided in subparagraph (3) of this paragraph. If an election by a corporation under section 1372(a) of the Code is not treated as terminated for a taxable year of the corporation as a result of an election and consents under this paragraph, such election under section 1372(a) of the Code shall be treated as being in effect with respect to all subsequent taxable years of the corporation unless it is otherwise terminated or revoked for any such subsequent year pursuant to section 1372(e) of the Code.
(2) Election by corporation. An election by a corporation pursuant to subparagraph (1)(iii) of this paragraph shall be filed with the district director with whom the corporation was required to file its return of income (see section 6037 of the Code and the regulations thereunder) for the earliest of its taxable years beginning after December 31, 1962, and ending before April 15, 1966, for which an election terminated under section 1372(e)(5) of the Code. Such election shall be filed within 3 years after the date prescribed by law (not including any extension thereof) on which such return was required to be filed, or within 90 days from February 28, 1967, whichever is later. (However, credit or refund of any overpayment attributable to the election may not be allowed or made if claim therefor has not been filed within the time prescribed by law; and, see subparagraph (3) of this paragraph providing that the statutory period for assessment of certain deficiencies against shareholders may not have expired on the date the election and consents under this paragraph are filed.) Such election shall be in the form of a statement, signed by a person authorized to sign the corporation's return of income, which shall expressly provide that the corporation elects the application of section 1372(e)(5) of the Internal Revenue Code, as amended by Pub. L. 89-389, with respect to its taxable years beginning after December 31, 1962, and ending before April 15, 1966. The statement shall set forth the name, address, and employer identification number of the corporation; the internal revenue officer with whom the corporation's returns of income have been filed for each of its taxable years beginning after December 31, 1962; the names and addresses of all persons who have been shareholders of the corporation at any time during each of its taxable years beginning after December 31, 1962; computations showing the amount of the corporation's overpayment or deficiency of tax for any taxable year which is attributable to the election under this paragraph; and computations showing each shareholder's portion of the undistributed taxable income (determined as provided in section 1373(b) of the Code) or net operating loss (determined as provided in section 1374(c) of the Code) for each taxable year of the corporation beginning after December 31, 1962, unless such computations were made on the corporation's returns of income for each of such years. In order for an election under this paragraph to be effective, it must be accompanied by the consents of certain shareholders as provided in subparagraph (3) of this paragraph.
(3) Consents by shareholders. An election by a corporation pursuant to this paragraph must be accompanied by the consent of each person who was a shareholder of the corporation at any time during any taxable year of the corporation beginning after December 31, 1962, and ending before April 15, 1966. This includes persons who may not be shareholders on the date the election is filed. Where stock of the corporation was owned by a husband and wife as community property (or the income from which was community property), or was owned by tenants in common, joint tenants, or tenants by the entirety, each person who had a community interest in such stock and each tenant in common, joint tenant, and tenant by the entirety must consent to the election. The consent of a minor shall be made by the minor or by his legal guardian, or by his natural guardian if no legal guardian has been appointed. The consent of an estate shall be made by the executor or administrator thereof. If a person who is required to file a consent under this subparagraph is deceased, the executor or administrator of such person's estate, or other person charged with the property of such person, shall file the required consent. The consent of each shareholder shall be in the form of a statement signed by the shareholder in which he states that he consents to the election by the corporation under this paragraph. Each of such statements shall set forth the name and address of the corporation and of the shareholder; the number of shares of stock of the corporation owned by such shareholder at any time during any taxable year of the corporation beginning after December 31, 1962; the date (or dates) on which such stock was acquired, and, if disposed of, the date (or dates) of disposition; and the internal revenue officer with whom the shareholder's income tax returns have been filed for each of such taxable years in which he owned any such stock. In addition, a consent under this paragraph is not effective unless (i) the statutory period for assessment of any deficiency for each taxable year for which there would be a deficiency attributable to the election and consents under this paragraph has not expired on the date the election and consents under this paragraph are filed, and (ii) there is included in, or attached to, the statement of consent a written consent that the statutory period for assessment of any deficiency for any taxable year (to the extent that such deficiency is attributable to the election and consents under this paragraph) shall not expire before the expiration of 1 year after the date the election and consents under this paragraph are filed. Each of the statements of consent under this subparagraph shall be filed with the corporation's election under this paragraph. The consents of all shareholders may be incorporated in one statement.
(4) Election and consents are binding. The election and consents under this paragraph are binding and may not be withdrawn.
(c) New shareholders. Section 1372(e)(1) of the Code provides that an election by a corporation under section 1372(a) of the Code shall terminate if certain new shareholders do not consent to such election within the time prescribed by regulations. New shareholders of a corporation which makes an election under paragraph (b) of this section may not have consented to the corporation's election under section 1372(a) of the Code within such prescribed time as a result of a termination of such election under section 1372(e)(5) of the Code prior to the enactment of Pub. L. 89-389. Therefore, notwithstanding the provisions of section 1372(e)(1) of the Code, and the regulations thereunder, an election by a corporation under section 1372(a) of the Code shall not be treated as terminated for the failure of any new shareholder to file a timely consent under section 1372(e)(1) of the Code, for any of the taxable years of the corporation between and including the earliest taxable year determined under subparagraph (1) of this paragraph, and the taxable year during which the corporation files an election under paragraph (b) of this section, if--
(1) The corporation's election under section 1372(a) of the Code would have terminated for a taxable year under section 1372(e)(5) of the Code in the event it had not made an election under paragraph (b) of this section, and
(2) A proper consent under section 1372(e)(1) of the Code is filed by such new shareholder with the corporation's election under paragraph (b) of this section. [T.D. 6912, 32 FR 3343, Feb. 28, 1967. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992] Sec. 301.9100-20T Election to treat certain distributions as madeon the last day of the taxable year.
(a) In general. Section 233(b) of the Revenue Act of 1964 (78 Stat. 112) amends the Internal Revenue Code of 1954 by adding to section 1375 a new subsection (e) (relating to certain distributions after close of taxable year). Section 1375(e) provides that a corporation, with the consent of its shareholders, may elect, for purposes of chapter 1 of the Code, to treat a distribution of money made after the close of the taxable year as made, and as received by its shareholders, on the last day of such taxable year if the following conditions are satisfied:
(1) The corporation makes a distribution of money to its shareholders on or before the 15th day of the third month following the close of a taxable year with respect to which it was an electing small business corporation within the meaning of section 1371(b);
(2) Such distribution is made pursuant to a resolution of the corporation's board of directors, adopted before the close of such taxable year, to distribute to its shareholders all or a part of the proceeds of one or more sales of capital assets, or of property described in section 1231(b), made during such taxable year; and
(3) Each shareholder on the day such distribution is received--
(i) Owns the same proportion of the stock of the corporation on such day as he owned on the last day of such taxable year, and
(ii) Consents to such election. Section 1375(e) applies only with respect to taxable years of corporations beginning after December 31, 1957.
(b) Time and manner for making election--(1) Taxable years ending after February 26, 1964. For taxable years ending after February 26, 1964, an election under section 1375(e) with respect to a taxable year shall be made by attaching to the corporation income tax return for such taxable year, filed not later than the time (including extensions thereof) prescribed by law, the following documents:
(1) Taxable years ending after February 26, 1964. For taxable years ending after February 26, 1964, an election under section 1375(e) with respect to a taxable year shall be made by attaching to the corporation income tax return for such taxable year, filed not later than the time (including extensions thereof) prescribed by law, the following documents:
(i) A statement that the corporation elects the application of section 1375(e) and the date and amount of each distribution to which the election applies;
(ii) A copy of the resolution of the board of directors referred to in paragraph (a)(2) of this section; and
(iii) A statement of the consent of each shareholder of the corporation containing the information required by, and filed in the manner provided in, paragraph (c) of this section.
(2) Taxable years beginning after December 31, 1957, and ending on or before February 26, 1964. For taxable years beginning after December 31, 1957, and ending on or before February 26, 1964, an election under section 1375(e) with respect to a taxable year shall be made on or before June 25, 1964, by either attaching the documents described in subparagraph (1) of this paragraph to its income tax return for such taxable year, or by filing such documents with the district director with whom the corporation has filed, or intends to file, its income tax return for such taxable year.
(3) Election is binding. An election under subparagraph (1) or (2) of this paragraph is binding and may not be withdrawn.
(c) Shareholders' consent. The consent of a shareholder to an election under section 1375(e) shall be in the form of a statement signed by the shareholder in which such shareholder consents to the election of the corporation. Such shareholder's consent is binding and may not be withdrawn after a valid election is made by the corporation. Each person who is a shareholder of the electing corporation must consent to the election; thus, where stock of the corporation is owned by a husband and wife as community property (or the income from which is community property), or is owned by tenants in common, joint tenants, or tenants by the entirety, each person having a community interest in such stock and each tenant in common, joint tenant, and tenant by the entirety must consent to the election. The consent of a minor shall be made by the minor or by his legal guardian, or his natural guardian if no legal guardian has been appointed. The consent of an estate shall be made by the executor or administrator thereof. The statement shall set forth the name, address, and account number of the corporation and of the shareholder, the date the distribution is received, the number and proportion of the shares of stock of the corporation owned by him on the date the distribution is received, and the number and proportion of such shares owned by him on the last day of the taxable year of the corporation with respect to which the election is made. The consents of all shareholders may be incorporated in one statement. [T.D. 6719, 29 FR 4771, Apr. 3, 1964. Redesignated by T.D. 8435, 57 FR 43896, Sept. 23, 1992]