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TITLE 26-INTERNAL REVENUE CODE (d) Election An election under this section shall be made at such time and in such manner as the Secre- tary may by regulations prescribe. (e) Changes in accounting method (1) Establiphment of account not considered change The establishment of an account described in subsection (a)(1) shall not be considered a change in method of accounting for purposes of section 446(e) (relating to requirement re- specting chtage of accounting method), and no adjustment shall be required under section 481 by reason of the establishment of such ac- count. (2) Certain taxpayers treated as having initiated change If the taxpayer treated vacation pay under section 97 of the Technical Amendments Act of 1958, as amended, for his last taxable year ending before January 1, 1973, and if such taxpayer fails to make an election under this section for his first taxable year ending after December 31, 1972, then, for purposes of sec- tion 481, such taxpayer shall be treated as having initiated a change in method of ac- counting with respect to vacation pay for his first taxable year ending after December 31, 1972. (Added Pub. L. 93-625, § 4(a), Jan. 3, 1974, 88 Stat. 2109, and amended Pub. L. 94-455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) REFERENCES IN TEXT Section 97 of the Technical Amendments Act of 1958, as amended, referred to in subsecs. (b)(1) and (e)(2), is set out as a Deductibility of Accrued Vacation Pay note under section 162 of this title. AMENDmrNTs 1976-Subsecs. (b), (c)(3), (d). Pub. L. 94-455 struch out "or his delegate" following "Secretary". EFCTIVE DATE Section 4(d) of Pub. L. 93-625 provided that: "(1) Except as provided in paragraph (2), the amendments made by this section [enacting this sec- tion and amending section 81 of this title] shall apply to taxable years beginning after December 31, 1973. "(2) If the taxpayer maintained an account for va- cation pay under section 97 of the Technical Amend- ments Act of 1958, as amended [set out as a note under section 162 of this title], for his last taxable year ending before January 1, 1973, the amendments made by this section [enacting this section and amending section 81 of this title] shall apply to tax- able years endhils after December 31, 1972." SECTION REFERIUD TO IN OTHER SECTIONS This section is referred to in section 81 of this title. § 464. Limitations on deductions in case of farming syndicates (a) General rule In the case of any farming syndicate (as de- fined in subsection (c)), a deduction (otherwise allowable under this chapter) for amounts paid for feed, seed, fertilizer, or other similar farm supplies shall only be allowed for the taxable year in which such feed, seed, fertilizer, or other supplies are actually used or consumed, or, if later, for the taxable year for which al- lowable as a deduction (determined without regard to this section). (b) Certain poultry expenses In the case of any farming syndicate (as de- fined in subsection (c))- (1) the cost of poultry (including egg-laying hens and baby chicks) purchased for use in a trade or business (or both for use in a trade or business and for sale) shall be capitalized and deducted ratably over the lesser of 12 months or their useful life in the trade or business, and (2) the cost of poultry purchased for sale shall be deducted for the taxable year in which the poultry is sold or otherwise dis- posed of. () Farming syndicate defined (1) In general For purposes of this section, the term "farming syndicate" means- (A) a partnership or any other enterprise other than a corporation which is not an electing small business corporation (as de- fined in section 1371(b)) engaged in the trade or business of farming, if at any time interests in such partnership or enterprise have been offered for sale in any offering required to be registered with any Federal or State agency having authority to regu- late the offering of securities for sale, or (B) a partnership or any other enterprise other than a corporation which is not an electing small business corporation (as de- fined in section 1371(b)) engaged in the trade or business of farming, if more than 35 percent of the losses during any period are allocable to limited partners or limited entrepreneurs. (2) Holdings attributable to active management For purposes of paragraph (1)(B), the fol- lowing shall be treated as an interest which is not held by a limited partner or a limited en- trepreneur: (A) in the case of any individual who has actively participated (for a period of not less than 5 years) in the management of any trade or business of farming, any inter- est in a partnership or other enterprise which is attributable to such active partici- pation, (B) in the case of any individual whose principal residence is on a farm, any part- nership or other enterprise engaged in the trade or business of farming such farm, (C) in the case of any individual who is ac- tively participating in the management of any trade or business of farming or who is an individual who is described In subpara- graph (A) or (B), any participation in the further processing of livestock which was raised in such trade or business (or in the trade or business referred to in subpara- graph (A) or (B)), (D) in the case of an individual whose principal business activity involves active participation in the management of a trade or business of farming, any interest in any other trade or business of farming, and, (E) any interest held by a member of the family (within the meaning of section 267(c)(4)) of a grandparent of an individual Page 368 § 464