26 U.S. Code § 443 - Returns for a period of less than 12 months
When the taxpayer, with the approval of the Secretary, changes hisannual accounting period. In such a case, the return shall be made for theshort period beginning on the day after the close of the former taxable yearand ending at the close of the day before the day designated as the first day of the new taxable year.
When the taxpayer is in existence during only part of what would otherwise be histaxable year.
If a return is made under paragraph (1) of subsection (a), the taxable income for theshort period shall be placed on an annual basis by multiplying themodified taxable income for such short periodby 12, dividing the result by the number of months in the short period. The tax shall be the same part of the tax computed on the annual basis as the number of months in the short periodis of 12 months.
Application for the benefits of this paragraph shall be made in such manner and at such time as the regulations prescribed under subparagraph (D) may require; except that the time so prescribed shall not be later than the time (including extensions) for filing the return for the firsttaxable year which ends on or after the day which is 12 months after the first day of theshort period. Such application, in case the return was filed without regard to this paragraph, shall be considered a claim for credit or refund with respect to the amount by which the tax is reduced under this paragraph.
For purposes of this subsection the term “modified taxable income” means, with respect to any period, the gross income for such period minus the deductions allowed by this chapter for such period (but, in the case of a short period, only the adjusted amount of the deductions for personal exemptions).
In the case of a taxpayer other than a corporation, if a return is made for ashort period by reason of subsection (a)(1) and if the tax is not computed under subsection (b)(2), then the exemptions allowed as a deduction undersection 151 (and any deduction in lieu thereof) shall be reduced to amounts which bear the same ratio to the full exemptions as the number of months in the short periodbears to 12.
2004—Subsec. (e)(3) to (5).Pub. L. 108–357 redesignated pars. (4) and (5) as (3) and (4), respectively, and struck out former par. (3) which read as follows: “Undistributed foreign personal holding company income, see section 557.”
1986—Subsec. (b)(1).Pub. L. 99–514, § 104(b)(7)(A), struck out “, and adding the zero bracket amount” after “by the number of months in the short period”.
Subsec. (b)(2)(A)(ii).Pub. L. 99–514, § 104(b)(7)(B), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the tax computed on the sum of the modified taxable incomefor the short periodplus the zero bracket amount.”
Subsec. (d).Pub. L. 99–514, § 701(e)(3), substituted “and tax preferences” for “for tax preferences” in heading and amended text generally. Prior to amendment, subsec. (d) read as follows: “If a return is made for a short periodby reason of subsection (a), then—
“(1) in the case of a taxpayer other than a corporation, the alternative minimum taxable income for theshort period shall be placed on an annual basis by multiplying that amount by 12 and dividing the result by the number of months in theshort period, and the amount computed under paragraph (1) of section 55(a) shall be the same part of the tax computed on the annual basis as the number of months in theshort period is of 12 months; and
“(2) the $10,000 amount specified in section 56 (relating to minimum tax for tax preferences), modified as provided by section 58, shall be reduced to the amount which bears the same ratio to such specified amount as the number of days in theshort period bears to 365.”
1983—Subsec. (e).Pub. L. 97–448 substituted “section 1398(d)(2)(E)” for “section 1398(d)(3)(E)”.
1980—Subsec. (d)(2).Pub. L. 96–222 struck out “in the case of a corporation,” before “the $10,000 amount”.
Subsec. (e).Pub. L. 96–589 inserted cross reference to section 1398(d)(3)(E) for returns for a period of less than 12 months in the case of a debtor’s election to terminate a taxable year.
1978—Subsec. (b)(1).Pub. L. 95–600, § 703(o)(2), substituted“modified taxable incomefor such short period” for “gross income for such short period(minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions)”.
Subsec. (b)(2).Pub. L. 95–600, § 703(o)(1), substituted in cl. (i)“modified taxable income” for “taxable income” in two places and in cl. (ii) “the sum of the modified taxable income” for “the taxable income” and “plus the zero bracket amount” for “without placing the taxable income on an annual basis”.
Subsec. (b)(3).Pub. L. 95–600, § 703(o)(3), added par. (3).
Subsec. (d).Pub. L. 95–600, § 421(e)(2), substituted “Adjustment in computing minimum tax for tax preferences” for “Adjustment in exclusion for computing minimum tax for tax preferences” in heading, redesignated existing provisions as par. (2) and as so redesignated applied par. (2) to corporations, and added par. (1).
1977—Subsec. (b)(1).Pub. L. 95–30 substituted “multiplying the gross income for such short period(minus the deductions allowed by this chapter for the short period, but only the adjusted amount of the deductions for personal exemptions) by 12, dividing the result by the number of months in the short period, and adding the zero bracket amount” for “multiplying such income by 12, and dividing the result by the number of months in the short period”.
1976—Subsec. (a)(1).Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (a)(3).Pub. L. 94–455, § 1204(c)(2), struck out par. (3) which made termination of taxpayer’s taxable yearunder section 6851 as one of the circumstances under which a tax return for a period of less than 12 months shall be made.
Subsec. (b)(2)(D).Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (d).Pub. L. 94–455, § 301(e), substituted “$10,000” for “$30,000”.
Subsec. (e)(5).Pub. L. 94–455, § 1607(b)(1)(C), substituted “section 857(b)(2)(C)” for “section 857(b)(2)(D)”.
1969—Subsecs. (d), (e).Pub. L. 91–172 added subsec. (d) and redesignated former subsec. (d) as (e).
1960—Subsec. (d)(5).Pub. L. 86–779 added par. (5).
Amendment byPub. L. 108–357 applicable to taxable yearsof foreign corporations beginning afterDec. 31, 2004, and to taxable yearsof United States shareholders with or within which such taxable yearsof foreign corporations end, seesection 413(d)(1) of Pub. L. 108–357, set out as an Effective and Termination Dates of 2004 Amendments note undersection 1 of this title.
Amendment bysection 104(b)(7) of Pub. L. 99–514 applicable to taxable yearsbeginning afterDec. 31, 1986, seesection 151(a) of Pub. L. 99–514, set out as a note undersection 1 of this title.
Amendment bysection 701(e)(3) of Pub. L. 99–514 applicable to taxable yearsbeginning afterDec. 31, 1986, with certain exceptions and qualifications, seesection 701(f) of Pub. L. 99–514, set out as an Effective Date note undersection 55 of this title.
Pub. L. 97–448, title III, § 311(b)(1),Jan. 12, 1983,96 Stat. 2411, provided that:
Amendment byPub. L. 96–589 applicable to bankruptcy cases commencing more than 90 days afterDec. 24, 1980, seesection 7(b) of Pub. L. 96–589, set out as a note undersection 108 of this title.
Amendment byPub. L. 96–222 effective, except as otherwise provided, as if it had been included in the provisions of theRevenue Act of 1978,Pub. L. 95–600, to which such amendment relates, seesection 201 of Pub. L. 96–222, set out as a note undersection 32 of this title.
Pub. L. 95–600, title VII, § 703(o)(4),Nov. 6, 1978,92 Stat. 2943, provided that:
Amendment bysection 421(e)(2) of Pub. L. 95–600 applicable to taxable yearsbeginning afterDec. 31, 1978, seesection 421(g) of Pub. L. 95–600, set out as a note undersection 5 of this title.
Amendment byPub. L. 95–30 applicable to taxable yearsbeginning afterDec. 31, 1976, seesection 106(a) of Pub. L. 95–30, set out as a note undersection 1 of this title.
Pub. L. 94–455, title III, § 301(g)(1),Oct. 4, 1976,90 Stat. 1553, provided that the amendment made bysection 301(e) of Pub. L. 94–455 is effective for items of tax preferences for taxable yearsbeginning afterDec. 31, 1975, with certain exceptions.
Amendment bysection 1204(c)(2) of Pub. L. 94–455 effective with respect to action taken under section 6851, 6861, or 6862 of this title where the notice and demand takes place afterFeb. 28, 1977, seesection 1204(d) of Pub. L. 94–455, as amended, set out as a note undersection 6851 of this title.
For effective date of amendment bysection 1607(b)(1)(C) of Pub. L. 94–455, seesection 1608(c) of Pub. L. 94–455, set out as a note undersection 857 of this title.
Amendment byPub. L. 91–172 applicable to taxable yearsending afterDec. 31, 1969, seesection 301(c) of Pub. L. 91–172, set out as a note undersection 5 of this title.
Amendment byPub. L. 86–779 applicable with respect to taxable yearsof real estate investment trusts beginning afterDec. 31, 1960, seesection 10(k) of Pub. L. 86–779, set out as an Effective Date note undersection 856 of this title.
For applicability of amendment bysection 701(e)(3) of Pub. L. 99–514 notwithstanding any treaty obligation of the United States in effect onOct. 22, 1986, seesection 1012(aa)(2) of Pub. L. 100–647, set out as a note undersection 861 of this title.