76
PUBLIC LAW 88-272-FEB. 26, 1964
[78 STAT.
pay for sudi property in a series of periodic paynieiiis of;\n a«^ree(l portion of the amounts due the seller under the plau, ex('ept that such term does not include any such plan with respect to a purchaser who uses his account primarily as an ordinary charge account." (b) EFFB:GTIVK DATE.—The amendment made by subsection (a) shall apply in respect of sales made during taxable years beginningafter December 31, 1963. SEC. 223. TIMING OF DEDUCTIONS IN CERTAIN CASES WHERE ASSERTED LIABILITIES ARE CONTESTED. (a)
7/stlf*io2o-^^' 76 Stat! 1199! 26 USC 461.
^^^ Section 461 (relating to general rule for taxable year of deduction) is amended by adding at the end thereof the following new subsection: "(f)
" Stat. 24.
TAXABLE YEAR OP' DEDUCTION.—
C o N T E S r a n LlABlLI'lTES.
If
" (1) the taxpayer contests an asserted 1 iability, " (2) the taxpayer transfers money or other property to provide for the satisfaction of the asserted liability, "(3) the contest with respect to the asserted liability exists after the time of the transfer, and "(4) but for the fact that the asserted liability is coutested, a deduction would be allowed for the taxable year of the transfer (or for an earlier taxable year), then the deduction shall be allowed for the taxable year of the transfer. This subsection shall not apply in respect of the deduction for income, war profits, and excess profits taxes iin{)osed by the authority of any foreign country or possession of the United States." (2) Section 43 of the Internal Revenue Code of n)3<) (relating to period for which deductions and credits taken) is amended by adding at the end thereof the following new sentences: "'If— (1) the taxpayer contests an asserted liability, "(2) the taxpayer transfers money or otliei- property to provide for the satisfaction of the asserted liability, "(3) the contest with respect to the asserted liability exists after the time of the transfer, and "(4) but for the fact that the asserted liability is contested, a deduction would be allowed for the taxable yeai- of the transfer (or for an earlier taxable year), then the deduction shall be allowed for the taxable year of the transfer. The preceding sentence shall not Jipply in respect of the deduction for income, war profits, and excess profits taxes imposed by the authority of any foreign country or possession of the United States. (b) KFFKCTIVK DATES.—Except as provided in subsections (c) and (<!)(1) (lie amendment made by subsection (a)(1) shall apply to taxable years beginning after December 31, 1953, and ending after August 16, 1954, and (2) the amendment made by subsection (a)(2) shall apply to taxable years to which the Internal Keveiiiie Code of 1939 applies. (c)
P^LKCTIOX
AS TO TRANSFERS
IN
TAXAHJ.K
YEARS
BEGINNING
1, 1964.— (1) The amendments made by subsection (a) shall not apply to any transfer of money or other property described in subsection (a) made in a taxable year beginning befoie January 1, 1964, if the taxpayer elects, in the manner provided by regulations prescribed by the Secretary of the Treasury or his delegate, to have this paragraph apply. Such an election— (A) must l>e made within one year after the date of the enactment of this Act,
IVKFORK JANUARY
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