72 S T A T. ]
PUBLIC LAW 85-866-SEPT. 2, 1958
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SEC. 28. PREPAID INCOME FROM NEWSPAPER AND PERIODICAL SUBSCRIPTIONS. (a) TAXABLE YEAR IN W H I C H INCLUDED I N GROSS INCOME.—Sub-
part B of part II of subchapter E of chapter 1 (relating to taxable year for which items of gross income are included) is amended by adding at the end thereof the following new section: "SEC. 455. PREPAID SUBSCRIPTION INCOME. "(a)
YEAR IN W H I C H INCLUDED.—Prepaid subscription income to
which this section applies shall be included in gross income for the taxable years during which the liability described in subsection (d) (2) exists. "(b) W H E R E TAXPAYER'S LIABILITY CEASES.—In the case of any prepaid subscription income to which this section applies— "(1) If the liability described in subsection (d)(2) ends, then so much of such income as was not includible in gross income under subsection (a) for preceding taxable years shall be included in gross income for the taxable year in which the liability ends. "(2) If the taxpayer dies or ceases to exist, then so much of such income as was not includible in gross income under subsection (a) for preceding taxable years shall be included in gross income for the taxable year in which such death, or such cessation of existence, occurs. " (c) PREPAID SUBSCRIPTION INCOME TO W H I C H T H I S SECTION A P PLIES.— "(1) ELECTION OF BENEFITS.—This section shall apply to pre-
paid subscription income if and only if the taxpayer makes an election under this section with respect to the trade or business in connection with which such income is received. The election shall be made in such manner as the Secretary or his delegate may by regulations prescribe. No election may be made with respect to a trade or business if in computing taxable income the cash receipts and disbursements method of accounting is used with respect to such trade or business. "(2) SCOPE or ELECTION.—An election made under this section shall apply to all prepaid subscription income received in connection with the trade or business with respect to which the taxpayer has made the election; except that the taxpayer may, to the extent permitted under regulations prescribed by the Secretary or his delegate, include in gross income for the taxable year of receipt the entire amount of any prepaid subscription income if the liability from which it arose is to end within 12 months after the date of receipt. An election made under this section shall not apply to any prepaid subscription income received before the first taxable year for which the election is made. " (3) W H E N ELECTION MAY BE MADE.— " (A) W I T H CONSENT.—A taxpayer
may, with the consent of the Secretary or his delegate, make an election under this section at any time. " (B) WITHOUT CONSENT.—A taxpayer may, without the
consent of the Secretary or his delegate, make an election under this section for his first taxable year (i) which begins after December 31, 1957, and (ii) in which he receives prepaid subscription income in the trade or business. Such election shall be made not later than the time prescribed by law for filing the return for the taxable year (including extensions thereof) with respect to which such election is made. "(4) PERIOD TO WHICH ELECTION APPI.IE8.—An election under this section shall be effective for the taxable year with respect to
26 USC 451-454.
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