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TITLE 26-INTERNAL REVENUE CODE CERTAIN OTHER TRANSFERS IN TAXABLE YEARS BEGIINNING BEFORE JAN. 1, 1964 Section 223(d) of Pub. L. 88-272 provided that: "The amendments made by subsection (a) [to this section, and section 43, Internal Revenue Code of 19393 shall not apply to any transfer of money or other property described in subsection (a) made in a taxable year beginning before January 1, 1964, If- "(1) no deduction has been allowed in respect of such transfer for any taxable year before the tax- able year in which the contest with respect to such transfer is settled, and "(2) refund or credit of any overpayment which would result from the application of such amend- ments to such transfer is prevented by the operation of any law or rule of law. In the case of any transfer to which this subsection applies, the deduction shall be allowed for the taxable year in which the contest with respect to such trans- fer is settled." CRoss RmnarEcEs Additional itemized deductions for individuals, see section 211 et seq. of this title. Itemized deductions for individuals and corpora- tions, see section 161 et seq. of this title. Items not paid within 2 months after close of tax- able year as not deductible, see section 267 of this title. Special deductions for corporations, see section 241 et seq. of this title. Time for filing returns, see sections 6072, 6081 of this title. SECTION REFERR TO IN OTHER SECTIONS This section is referred to in section 164 of this title. [§ 462. Repealed. June 15, 1955, ch. 143, § 1(b), 69 Stat. 134] Section, act Aug. 16, 1954, ch. 736 68A Stat. 158, re- lated to reserves for estimated expenses. EFFETIVE DATE OF REPEAL Repeal of this section effective with respect to tax. able years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 3 of Act June 15, 1955 set out as an Effective Date of 1955 Amendment note under section 381 of this title. SAVINGS PROVISIONS For provisions concerning increase in tax in any tax- able year ending on or before June 15, 1955 by reason of enactment of act June 15, 1955, see section 4 of act June 15, 1955, set out as a Savings Provisions note under section 381 of this title. § 463. Accrual of vacation pay (a) Allowance of deduction At the election of a taxpayer whose taxable income is computed under an accrual method of accounting, if the conditions of section 162(a) are otherwise satisfied, the deduction al- lowable under section 162(a) with respect to va- cation pay shall be an amount equal to the sum of- (1) a reasonable addition to an account rep- resenting the taxpayer's liability for vacation pay earned by employees before the close of the taxable year and payable during the tax- able year or within 12 months following the close of the taxable year; plus (2) the amount (if any) of the reduction at the close of the taxable year in the suspense account provided in subsection (c)(2). Such liability for vacation pay earned before the close of the taxable year shall include amounts which, because of contingencies, would not (but for this section) be deductible under section 162(a) as an accrued expense. All payments with respect to vacation pay shall be charged to suc), 'iccount, (b) Opening balance The opening balance of the account described in subsection (a)(1) for its first taxable year shall, under regulations prescribed by the Sec- retary, be- (1) in the case of a taxpayer who main- tained a predecessor account for vacation pay under section 97 of the Technical Amend- ments Act of 1958, as amended, for his last taxable year ending before January 1, 1973, and who makes an election under this section for his first taxable year ending after Decem- ber 31, 1972, the larger of- (A) the balance in such predecessor ac- count at the close of such last taxable year, or (B) the amount determined as if the tax- payer had maintained an account described in subsection (a)(1) for such last taxable year, or (2) in the case of any taxpayer not described in paragraph (1), an amount equt.l to the largest closing balance the tax- payer would have had for any of the tax- payer's 3 taxable years immediately preced- ing such first taxable year if the taxpayer had maintained such account throughout such 3 immediately preceding taxable years. (c) Suspense account for deferred deduction (1) Initial suspense account The amount of the suspense account at the beginning of the first taxable year for which the taxpaye mrm-.tains under this section an account (described in subsection (a)(1)) shall be the amount of the opening balance de- scribed in subsection (b) minus the amount, if any, allowed as deductions for prior taxable years for vacation pay accrued but not paid at the close of the taxable year preceding such first taxable year. (2) Adjustments in suspense account At the close of each taxable year the sus- pense account shall be- (A) reduced by the excess, if any, of the amount in the suspense account at the be- ginning of the taxable year over the amount in the account described in subsec- tion (a)(1) at the close of the taxable year (after making the additions and charges for such taxable year provided in subsection (a)), or (B) increased (but not to an amount greater than the initial balance of the sus- pense account) by the excess, if any of the amount in the account described in subsec- tion (a)(1) at the close of the taxable year (after making the additions and charges for such taxable year provided in subsection (a)) over the amount in the suspense ac- count at the beginning of the taxable year. (3) Section 381 acquisitions The application of this subsection to any acquisition to which section 381(a) applies shall be determined under regulations pre- scribed by the Secretary. Page 367 § 463