26 USC 444 - Election of taxable year other than required taxable year

U.S Code last checked for updates: May 03, 2024

§ 444.

Election of taxable year other than required taxable year

(a)

General rule

(b)

Limitations on taxable years which may be elected

(1)

In general

(2)

Changes in taxable year

Except as provided in paragraph (3), in the case of an entity changing a taxable year, an election may be made under subsection (a) only if the deferral period of the taxable year elected is not longer than the shorter of—

(A)

3 months, or

(B)

the deferral period of the taxable year which is being changed.

(3)

Special rule for entities retaining 1986 taxable years

(4)

Deferral period

For purposes of this subsection, except as provided in regulations, the term “deferral period” means, with respect to any taxable year of the entity, the months between—

(A)

the beginning of such year, and

(B)

the close of the 1st required taxable year ending within such year.

(c)

Effect of election

If an entity makes an election under subsection (a), then—

(1)

in the case of a partnership or S corporation, such entity shall make the payments required by section 7519, and

(2)

in the case of a personal service corporation, such corporation shall be subject to the deduction limitations of section 280H.

(d)

Elections

(1)

Person making election

(2)

Period of election

(A)

In general

(B)

No further election

(3)

Tiered structures, etc.

(A)

In general

Except as otherwise provided in this paragraph—

(i)

no election may be under subsection (a) with respect to any entity which is part of a tiered structure, and

(ii)

an election under subsection (a) with respect to any entity shall be terminated if such entity becomes part of a tiered structure.

(B)

Exceptions for structures consisting of certain entities with same taxable year

(e)

Required taxable year

(f)

Personal service corporation

(g)

Regulations

(Added Pub. L. 100–203, title X, § 10206(a)(1), Dec. 22, 1987, 101 Stat. 1330–397; amended Pub. L. 100–647, title II, § 2004(e)(1), (2)(A), (12), (13), Nov. 10, 1988, 102 Stat. 3600, 3602.)

cite as: 26 USC 444