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TITLE 28-INTERNAL REVENUE CODE XIX, §§ 1901(a)(68), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1775, 1834.) A MmENTs 1976-Subsec. (c). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary" wherever appearing. Subsee. (c)(3)(B). Pub. L. 94-455, § 1901(a)(68). sub- stituted "for its first taxable year" for "for its first taxable year (I) which begins after December 31, 1980, and (ii)". ErFECTIVS DATE OF 1976 AMENDMENT Amendment of subsec. (c)(3)(B) by section 1901(a)(68) of Pub. L. 94-455 effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title. EFFECTVE DATE Section 2 of Pub. L. 87-109 provided that: "The amendments made by this Act [adding this section] shall apply with respect to taxable years beginning after December 31, 1960." SECTION REFERRD TO IN OTHER SECTIONS This section is referred to in section 277 of this title. SUBPART C-TAXABLE YEAR FOR WHICH DEDUCTIONS TAKEN Sec. 461. (462. 463. 464. 465. General rule for taxable year of deduction. Repealed.] Accrual of vacation pay. Limitations on deductions in case of farming syndicates. Deductions limited to amount at risk in case of certain activities. AMENDMENTS 1976-Pub. L. 94-455, title II, §§ 204(b), 207(a)(2), Oct. 4, 1976, 90 Stat. 1532, 1537, added items 464 and 465. 1975-Pub. L. 93-625o §4(b). Jan. 3, 1975, 88 Stat. 2111, added item 463. 1955-Act June 15, 1955, ch. 143, § 2(3), 69 Stat. 135, struck out item 462. § 461. General rule for taxable year of deduction (a) General rule The amount of any deduction or credit al- lowed by this subtitle shall be taken for the taxable year which is the proper taxable year under the method of accounting used in com- puting taxable income. (b) Special rule in case of death In the case of the death of a taxpayer whose taxable income is computed under an accrual method of accounting, any amount accrued as a deduction or credit only by reason of the death of the taxpayer shall not be allowed In comput- ing taxable income for the period in which falls the date of the taxpayer's death. (c) Accrual of real property taxes (1) In general If the taxable income is computed under an accrual method of accounting, then, at the election of the taxpayer, any real property tax which is related to a definite period of time shall be accrued ratably over that period. (2) When election may be made (A) Without consent A taxpayer may, without the consent of the Secretary, make an election under this subsection for his first taxable year in which he incurs real property taxes. Such an election shall be made not later than the time prescribed by law for filing the return for such year (including extensions there- of). (B) With consent A taxpayer may, with the consent of the Secretary, make an election under this sub- section at any time. (d) Limitation on acceleration of accrual of taxes (1) General rule In the case of a taxpayer whose taxable income is computed under an accrual method of accounting, to the extent that the time for accruing taxes is earlier than it would be but for any action of any taxing jurisdiction taken after December 31, 1960, then, under regulations prescribed by the Secretary, such taxes shall be treated as accruing at the time they would have accrued but for such action by such taxing Jurisdiction. (2) Limitation Under regulations prescribed by the Secre- tary, paragraph (1) shall be inapplicable to any item of tax to the extent that Its applica- tion would (but for this paragraph) prevent all persons (including successors in interest) from ever taking such item into account. (e) Dividends or Interest paid on certain deposits or withdrawable accounts Except as provided in regulations prescribed by the Secretary, amounts paid to, or credited to the accounts of, depositors or holders of ac- counts as dividends or interest on their deposits or withdrawable accounts (if such amounts paid or credited are withdrawable on demand sub- Ject only to customary notice to withdraw) by a mutual savings bank not having capital stock represented by shares, a domestic building and loan association, or a cooperative bank shall not be allowed as a deduction for the taxable year to the extent such amounts are paid or credited for periods representing more than 12 months. Any such amount not allowed as a deduction as the result of the application of the preceding sentence shall be allowed as a deduction for such other taxable year as the Secretary deter- mines to be consistent with the preceding sen- tence. (f) Contested liabilities If- (1) the taxpayer contests an asserted liabil- ity, (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 liabil- ity is contested, a deduction would be allowed for the taxable year of the transfer (or for an earlier taxable year), Page 365