186
72d CONGRESS . SESS. I. CH. 209. JUN E 6, 1932 . INCOME TAX ab le year that proportion of the installment payments actually received in that year which the gross profit realized or to be realized when payment is completed, bears to the total contract price . Returns of income (b) SALES OF REALTY AND CASUAL SALES OF PERSONALTY ;In the from casual sales of case (1) of a casual sale or other casual disposition of personal personalty or of realty . property ( other than prop erty of a kind which would pro perly be included in the inventory of the taxpayer if on hand at the close of the taxable year), for a price exceeding $1,000, or (2) of a sale or other disposition of real property, if in either case the initial pay- ments do no t exceed 40 per centum of the s elling price, th e income may, under regulations prescribed by the Com mis sio ner wi th the app rov al o f the Secretary, b e returned on th e basis and in th e manner above prescribed in this section . As used in this section the term " initial payments " means the payments received in cash or property other than evidences of indebtedness of the purchaser during the taxable per iod in which the sale or other dis position is made . Computation of (C) C HANGE FROM A CCRUAL TO INSTALLMENT BASIs .- If a taxpayer income
change to installment basis . entitled to the benefits of subsection (a) elects for any taxable year to report h is net income on the installment b asis, then in co mputing his income for the year of change or any subsequent year, amounts actu- ally received during any such year on account of sales or other dispositions of property made in any prior year shall not be excluded. Gain or loss upon di sposi tion o f
(d)
GA IN
OR
Loss
UP ON
DIS POS ITI ON
OF
INS TAL LME NT
OBL IGA -
install-
me nt ob ligati ons .
TIONS.-If an installment
obligation is satisfied at other than its face
value or distributed, transmitted, sold, or otherwise disposed of, gain
or loss shall result to the extent of the difference between the basis
of the oblig ation and (1) in t he case of satisf a'etion at other t han face
value or a sale or exchange -the amount rea lized, or (2) in case of
a distribution, transmission, or disposition otherwise than by sale
or exchange -the fair market value of the o bligation at the time of
Basis.
such distribution, transmission, or disposition .
The
bas is
of
the
obligation shall be the excess of the face value of the obligation over
an
amount equal to
the income which would
be returnable were the
death n otm in
ssion
stallme
t obligation satisfied in full. This subsection shall not apply to the
obligations .
transmission at death of installment obligations if there is filed with
the Commissioner, at such time as he may by regulation prescribe, a
bond in such amount and with such sureties as he
may deem
neces-
sary, conditioned upon the return as income, by the person receiving
any
payment
on
such obligations,
of the same
proportion
of
such
payment as wou ld be returnabl e as income by t he decedent if h e had
lived
and
had
received such
payment .
Allocation of income
SEC. 45 .
AL LOCATION
OF
I NCOME
AND
DED UCTIONS .
and deductions. Pro-
visions if same interests
In any case of two or more trades or businesses (whether or not
b
control
usi ne
two or more
whether or not organized in the United States, and businesses . inc orp orat ed, whether or not affiliated) owne d or controlled d irectly or indir ectly by the same interests, the Commissioner is authorized to distribute, apportion, or allocate gross income or deduct ions between or among such trades or businesses, if he determines that such distribution, apportionment, or allocation is necessary in ord er to prevent ev asion of taxes or clearly to reflect the income of any of such trades or businesses. Change of accounting SEC. 46 . CHANGE OF AC COUNTING PERI OD . period . Net means comput- If a taxpayer changes his accounting period from fiscal year to pe on basis of new period . calendar year, from calendar year to fiscal or from one fiscal year to anothr, the net income shall, with thyear, aproval of the Com- missioner, be computed on the basis of such n ew accounting pe riod, subject to the provisions of section 47 .
