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TITLE 26-INTERNAL REVENUE CODE this title] shall apply to taxable years beginning after December 31, 1976." ELECTION TO CHANGE FROM STATIC VALUE METHOD TO ACCRUAL METHOD OF ACCOUNTING Section 207(c)(3) of Pub. L. 94-455 provided that: "(A) In general.-If- "(I) a corporation has computed its taxable income on an annual accrual method of accounting together with a static value method of accounting for deferred costs of growing crops for the 10 tax. able years endIng with its first taxable year begin. ning after Dec mb3r 31, 1975, "(ii) such corporation raises crops which are har- vested not less than 12 months after planting, and "(iiI) such corporation elects, within one year after the date of the enactment of this Act [Oct. 4, 1976] and in such manner as the Secretary of the Treasury or his delegate prescribes, to change to the annual accrual method of accounting (within the meaning of section 447(g)(2) of the Internal Revenue Code of 1954 [subsec. (g)(2) of this sec- tionD for taxable years beginning after December 31,1976, such change shall be treattd as having been made with the consent of the Secretary of the Treasury, and, under regulations prescribed by the Secretary of the Treasury or his delegate, the net amount of the adjustments required by section 481(a) of the In- ternal Revenue Code of 1954 [section 481(a) of this title] to be taken into account by the taxpayer in computing taxable income shall (except as otherwise provided in such regulations) be taken into account in each of the 10 taxable years beginning wit'i the year of change. "(B) Coordination with section 447 of the Code.-A corporation which elects under subparagraph (A) to change to the annual accrual method of accounting shall, for purposes of section 447(g) of the Internal Revenue Code of 1954 [subsec. (g) of this section], be deemed to be a corporation which has computed its taxable income on an annual accrual method of ac- counting for its 10 taxable years ending with its first taxable year beginning after December 31, 1975. "(C) Certain corporate reorganizations. -For pur- poses of this paragraph, if a corporation acquired substantially all the assets of a farming trade or business from another corporation in a transaction in which no gain or loss was recognized to the trans- feror or transferee corporation, the transferee cor- poration shall be deemed to have computed its tax- able income on an annual accrual method of ac- counting together with a static value method of ac- counting for deferred costs of growing crops during the period for which the transferor corporation com- puted its taxable income from such trade or business on such accrual and static value method." SUBPART B-TAXABLE YEAR FOR WHICH ITEMS OF GROSS INCOME INCLUDED Sec. 451. General rule for taxable year of inclusion. [452.Repealed.] 453. Installment method. 454. Obligations issued at discount. 455. Prepaid subscription income. 456. Prepaid dues income of certain membership orga- nizations. AMENDMENTS 1961-Pub. L. 87-109, § 1(b), July 26, 1961, 75 Stat. 224, added item 456. 1958-Pub. L, 85-866, title I, § 28(b), Sept. 2, 1958, 72 Stat. 1626, added item 455. 1955-Act June 15, 1955, ch. 143, § 2(2), 69 Stat. 135, struck out Item 452. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85-866 effective with respect to taxable years beginning after Dec. 31, 1957, see sec- tion 28(c) of Pub. L. 85-866 set out as an Effective Date note under section 455 of this title. § 451. General rule for taxable year of inclusion (a) General rule The amount of any item of gross income shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under the method of accounting used in com- puting taxable income, such amount is to be properly accounted for as of a different period. (b) Special rule in case of deala In the case of the death of a taxpayer whose taxable income is computed under an accrual method of accountiig, any amount accrued only by reason of the death of the taxpayer shall not be included in computing taxable income for the period in which falls the date of the taxpayer's death. (c) Special rule for employee tips For purposes of subsection (a), tips included in a written statement furnished an employer by an employee pursuant to section 6053(a) shall be deemed to be received at the time the written statement including such tips is fur- nished to the employer. (d) Special rule for crop insurance proceeds or disas. ter payments In the case of insurance proceeds received as a result of destruction or damage to crops, a taxpayer reporting on the cash receipts and dis- bursements method of accounting may elect to include such proceeds in income for the taxable year following the taxable year of destruction or damage, if he establishes that, under his practice, income from such crops would have been reported in a following taxable year. For purposes of the preceding sentence, payments received under the Agricultural Act of 1949, as amended, as a result of (1) destruction or damage to crops caused by drought, flood, or any other natural disaster, or (2) the inability to plant crops because of such a natural disas- ter shall be treated as insurance proceeds re- ceived as a result of destruction or damage to crops. An election under this subsection for any taxable year shall be made at such time and in such manner as the Scretary prescribes. (e) Special rule for proceeds from livestock sold on account of drought (1) In general In the case of income derived from the sale or exchange of livestock (other than livestock described in section 1231(b)(3)) in excess of the number the taxpayer would sell if he fol- lowed his usual business practices, a taxpayer reporting on the cash receipts and disburse- ments method of accounting may elect to in- clude such income for the taxable year fol- lowing the taxable year in which such sale or exchange occurs if he establishes that, under his usual business practices, the sale or ex- change would not have occurred in the tax- able year in which it occurred if it were not for drought conditions, and that these drought conditions had resulted in the area being designated as eligible for assistance by the Federal Government. 71-990 0 - 78 - 25 (Vol. 7) Page 357/