101 STAT. 1330-396
PUBLIC LAW 100-203—DEC. 22, 1987
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For purposes of this clause, the term 'stock' does not include stock described in section 1563(c)(1). *°* ^^, "(C) FAMILY CORPORATION.—For purposes of this /* ^ ' section,'"*" the term 'family corporation' means— "(i) any corporation if at least 50 percent of the total combined voting power of all classes of stock entitled to vote, and at least 50 percent of all other classes of stock -s J ^,,^ of the corporation, are owned by members of the same L,^^ r family, and "(ii) any corporation described in subsection (h)." (b) SUSPENSE ACCOUNT IN LIEU OF 481 ADJUSTMENTS.—Section 447
is amended by adding at the end thereof the following new subsection: "(i) SUSPENSE ACCOUNT FOR FAMILY CORPORATIONS.—
"(1) IN GENERAL.—If any family corporation is required by this section to change its method of accounting for any taxable year (hereinafter in this subsection referred to as the 'year of the change'), notwithstanding subsection (f), such corporation shall establish a suspense account under this subsection in lieu of taking into account adjustments under section 481(a) with respect to amounts included in the suspense account. "(2) INITIAL OPENING BALANCE.—The initial opening balance
of the account described in paragraph (1) shall be the lesser of— "(A) the net adjustments which would have been required to be taken into account under section 481 but for this subsection, or ., "(B) the amount of such net adjustments determined as of the beginning of the taxable year preceding the year of change. 1^ If the amount referred to in subparagraph (A) exceeds the amount referred to in subparagraph (B), notwithstanding paragraph (1), such excess shall be included in gross income in the ^; year of the change. ijj "(3) REDUCTION IN ACCOUNT IF FARMING BUSINESS CON'*'[ TRACTS.—If—
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"(A) the gross receipts of the corporation from the trade or business of farming for the year of the change or any subsequent taxable year, is less than "(B) such gross receipts for the taxpayer's last taxable year beginning before the year of the change (or for the ,^ most recent taxable year for which a reduction in the
- ' suspense account was made under this paragraph),
the amount in the suspense account (after taking into account prior reductions) shall be reduced by the percentage by which the amount described in subparagraph (A) is less than the amount described in subparagraph (B).
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"(4) INCOME INCLUSION.—Any
reduction
in
the
suspense
if account under paragraph (3) shall be included in gross income ^ for the taxable year of the reduction. "(5) INCLUSION WHERE CORPORATION CEASES TO BE A FAMILY "' CORPORATION.—
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"(A) IN GENERAL.—If the corporation ceases to be a family "^^~ corporation during any taxable year, the amount in the suspense account (after taking into account prior reduc'"•Copy read "1563(cKl)." """Copy read "section.".
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