PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3439
"(A) SiMPUFiED METHOD OF cx)ST ALLOCATION.—In the case of any long-term contract, the Secretary may prescribe a simplified procedure for allocation of costs to such contract in lieu of the method of allocation under subsection (c). "(B) LOOK-BACK METHOD NOT TO APPLY TO CERTAIN CON-
TRACTS.—Paragraph (2)(B) and subsection (a)(2) shall not apply to any contract— "(i) the gross price of which (as of the completion of the contract) does not exceed the lesser of— "O) $1,000,000, or "(ED 1 percent of the average annual gross receipts of the taxpayer for the 3 taxable years preceding the taxable year in which the contract was completed, and "(ii) which is completed within 2 years of the contract commencement date. For purposes of this subparagraph, rules similar to the rules of subsections (e)(2) and (f)(3) shall apply." (B) Section 460(b)(2) of the 1986 Code is amended by striking out "In" and inserting in lieu thereof "Except as provided in paragraph (4), in". (3) Subparagraph (B) of section 804(d)(2) of the Reform Act is 26 USC 460 note. amended by striking out "section 263A(c)(5)" and inserting in lieu thereof "section 460(c)(5)". (4)(A) Paragraph (3) of section 4600t)) of the 1986 Code is amended by adding at the end thereof the following new sentences: "For purposes of the preceding sentence, any amount received or accrued after completion of the contract shall be taken into account by discounting (using the Federal mid-term rate determined under section 1^4(d) as of the time such amount was received or accrued) such amount to its value as of the completion of the contract. The taxpayer may elect with respect to any contract to have the preceding sentence not apply to such coiity]rd.c^ (B) Subparagraph (B) of section 4600i)X2) of the 1986 Code is amended by striking out "completion of the contract" and inserting in lieu thereof "completion of the contract (or, with respect to any amount received or accrued after completion of the contract, when such amount is so received or accrued)". (d) AMENDIKIENT RELATED TO SECTION 805 OF THE REFORM ACT.—
(1) Section 166(d)(l)(A) of the 1986 Code is amended by striking out "subsections (a) and (c)" and inserting in lieu thereof "subsection (a)". (2) Subsection (b) of section 805 of the Reform Act is amended 26 USC 166. by inserting ", as amended by section 901(d)(4)," after "Section 166". (3) Subsection (a) of section 582 of the 1986 (Dode is amended by striking out "subsections (a), (b), and (c) of section 166" and inserting in lieu thereof "subsections (a) and (b) of section 166". (e) AMENDMENTS RELATED TO SECTION 806 OF THE REFORM ACT.—
(I)(A) Clause (i) of section 706a)XlXB) of the 1986 Code is amended to read as follows: "(i) the majority interest taxable year (as defined in paragraph (4)),". (B) Paragraph (4) of section 7060t)) of the 1986 Code is amended to read as follows:
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