Page 64

131 STAT. 2116 PUBLIC LAW 115–97—DEC. 22, 2017 by the taxpayer during a taxable year if such taxpayer ceases to exist during (or with the close of) such taxable year. ‘‘(4) ADVANCE PAYMENT.—For purposes of this subsection— ‘‘(A) IN GENERAL.—The term ‘advance payment’ means any payment— ‘‘(i) the full inclusion of which in the gross income of the taxpayer for the taxable year of receipt is a permissible method of accounting under this section (determined without regard to this subsection), ‘‘(ii) any portion of which is included in revenue by the taxpayer in a financial statement described in clause (i) or (ii) of subsection (b)(1)(A) for a subse- quent taxable year, and ‘‘(iii) which is for goods, services, or such other items as may be identified by the Secretary for pur- poses of this clause. ‘‘(B) EXCLUSIONS.—Except as otherwise provided by the Secretary, such term shall not include— ‘‘(i) rent, ‘‘(ii) insurance premiums governed by subchapter L, ‘‘(iii) payments with respect to financial instruments, ‘‘(iv) payments with respect to warranty or guar- antee contracts under which a third party is the pri- mary obligor, ‘‘(v) payments subject to section 871(a), 881, 1441, or 1442, ‘‘(vi) payments in property to which section 83 applies, and ‘‘(vii) any other payment identified by the Sec- retary for purposes of this subparagraph. ‘‘(C) RECEIPT.—For purposes of this subsection, an item of gross income is received by the taxpayer if it is actually or constructively received, or if it is due and payable to the taxpayer. ‘‘(D) ALLOCATION OF TRANSACTION PRICE.—For pur- poses of this subsection, rules similar to subsection (b)(4) shall apply.’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2017. (d) COORDINATION WITH SECTION 481.— (1) IN GENERAL.—In the case of any qualified change in method of accounting for the taxpayer’s first taxable year begin- ning after December 31, 2017— (A) such change shall be treated as initiated by the taxpayer, and (B) such change shall be treated as made with the consent of the Secretary of the Treasury. (2) QUALIFIED CHANGE IN METHOD OF ACCOUNTING.—For purposes of this subsection, the term ‘‘qualified change in method of accounting’’ means any change in method of accounting which— (A) is required by the amendments made by this sec- tion, or 26 USC 451 note. 26 USC 451 note. VerDate Sep 11 2014 10:09 Oct 18, 2018 Jkt 079139 PO 00097 Frm 00064 Fmt 6580 Sfmt 6581 E:\PUBLAW\PUBL097.115 PUBL097 dkrause on DSKBC28HB2PROD with PUBLAWS