CODIFICATION OF INTERNAL REVENUE LAWS Part III-Credits Against Tax SEC. 31. TAXES OF FOREIGN COUNTRIES AND POSSESSIONS OF UNITED STATES. The amount of income, war-profits, and excess-profits taxes im- posed by foreign countries or possessions of the United States shall be allowed as a credit against the tax, to the extent provided in section 131. SEC. 32. TAXES WITHHELD AT SOURCE. The amount of tax withheld at the source under section 143 or 144 shall be allowed as a credit against the tax. SEC. 33. CREDIT FOR OVERPAYMENTS. For credit against the tax of overpayments of taxes imposed by this chapter for other taxable years, see section 322. Part IV-Accounting Periods and Methods of Accounting SEC. 41 . GENERAL RULE. The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner does clearly reflect the income. If the taxpayer's annual accounting period is other than a fiscal year as defined in section 48 or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year. For use of inventories, see section 22 (c). SEC. 42 . PERIOD IN WHICH ITEMS OF GROSS INCOME INCLUDED. The amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer, unless, under methods of accounting permitted under section 41, any such amounts are to be properly accounted for as of a different period. In the case of the death of a taxpayer there shall be included in computing net income for the taxable period in which falls the date of his death, amounts accrued up to the date of his death if not otherwise properly includible in respect of such period or a prior period. SEC. 43. PERIOD FOR WHICH DEDUCTIONS AND CREDITS TAKEN. The deductions and credits (other than the corporation dividends paid credit provided in section 27) provided for in this chapter shall be taken for the taxable year in which "paid or accrued" or "paid or incurred", dependent upon the method of accounting upon the basis of which the net income is computed, unless in order to clearly reflect the income the deductions or credits should be taken as of a different period. In the case of the death of a taxpayer there shall be allowed as deductions and credits for the taxable period in which falls the date of his death, amounts accrued up to the date of his death (except deductions under section 23 (o)) if not otherwise properly allowable in respect of such period or a prior period. SEC. 44 . INSTALLMENT BASIS. (a) DEALERS IN PERSONAL PROPERTY.- IUnder regulations pre- scribed by the Commissioner with the approval of the Secretary, a person who regularly sells or otherwise disposes of personal prop- erty on the installment plan may return as income therefrom in any taxable year that proportion of the installment payments actually received in that year which the gross profit realized or to be realized when payment is completed, bears to the total con- tract price. 24
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