Treasury Regulations (26 C.F.R.)
26 CFR § 301.7701(b)-6
Taxable year.
# (a) In general.
An alien individual who has not established a fiscal year as his or her taxable year prior to the period that the individual is subject to United States income tax as a resident or a nonresident shall adopt the calendar year as his or her taxable year. An alien who has established a fiscal year in a foreign country prior to the period that the individual is subject to United States income tax may adopt the calendar year as his or her taxable year for United States income tax purposes without requesting a change in accounting period. An individual will be considered to have established a fiscal year (whether in the United States or a foreign country) if the annual accounting period on which the individual computes his or her income is a fiscal year, the individual keeps his or her books in accordance with that fiscal year, and the requirements of section 441 and § 1.441-1(b) of this chapter are otherwise satisfied. An alien who has established a fiscal year and is a resident alien during the calendar year will be treated as a resident alien with respect to any portion of his or her taxable year (beginning with the individual's residency starting date and ending with the individual's residency termination date) that falls within such calendar year. Once the individual has established either a fiscal or calendar year taxable year for any period for which the individual is subject to United States income tax, the individual may not change that taxable year without the approval of the Secretary. See section 442.
# (b) Examples.
The following examples illustrate the operation of this section:
Example 1.
B, a citizen and resident of foreign country F, was engaged in a United States business during 1982 and filed a return on a fiscal year basis. B's fiscal year runs from October 1 to September 30. B comes to the United States on March 8, 1985 and remains in the United States until October 10, 1985, when he returns to country F. B maintains a closer connection to and his tax home in Country F for the remainder of calendar year 1985. B, who is not a United States resident at any time in 1986, is a United States resident for the period that begins on March 8, 1985, and ends on October 10, 1985. B has adopted a fiscal year taxable year for purposes of computing his United States income tax liability. For his fiscal year that ends on September 30, 1985, B will be taxed as a United States resident for the period that begins on March 8, 1985 and ends on September 30, 1985. For his fiscal year that ends on September 30, 1986, B will only be taxed as a United States resident for the period that begins on October 1, 1985 and ends on October 10, 1985.
Example 2.
The facts are the same as in Example 1, except that B's 1982 business was a country F business established on a fiscal year basis and at no time prior to 1985 was B subject to United States income tax. B may adopt a calendar year as his taxable year for United States income tax purposes without requesting a change of accounting period. B continues to use a fiscal year as his taxable year. For his fiscal year that ends on September 30, 1985, B will be taxed as a United States resident for the period that begins on March 8, 1985 and ends September 30, 1985. For his fiscal year that ends on September 30, 1986, B will be taxed as a United States resident for the period that begins on October 1, 1985 and ends on October 10, 1985.
Example 3.
The facts are the same as in Example 1, except that B's 1982 business was a country F business established on a fiscal year basis and at no time prior to 1985 was B subject to United States income tax. B may adopt a calendar year as his taxable year for United States income tax purposes without requesting a change of accounting period. B adopts a calendar year as his taxable year for 1985. For his calendar year taxable year ending on December 31, 1985, B will be taxed as a United States resident for the period that begins on March 8, 1985, and ends on October 10, 1985.
[T.D. 8411, 57 FR 15250, Apr. 27, 1992; 57 FR 28612, June 26, 1992, as amended by T.D. 8996, 67 FR 35012, May 17, 2002]
Source: view the official text
In this part (40 sections)
- 301.7701-6 · Definitions; person, fiduciary.
- 301.7701-7 · Trusts—domestic and foreign.
- 301.7701-8 · Military or naval forces and Armed Forces of the United…
- 301.7701-9 · Secretary or his delegate.
- 301.7701-10 · District director.
- 301.7701-11 · Social security number.
- 301.7701-12 · Employer identification number.
- 301.7701-13 · Pre-1970 domestic building and loan association.
- 301.7701-13A · Post-1969 domestic building and loan association.
- 301.7701-14 · Cooperative bank.
- 301.7701-15 · Tax return preparer.
- 301.7701-16 · Other terms.
- 301.7701-17T · Collective-bargaining plans and agreements (temporary).
- 301.7701-18 · Definitions; spouse, husband and wife, husband, wife,…
- 301.7701(b)-0 · Outline of regulation provision for section 7701(b)-1…
- 301.7701(b)-1 · Resident alien.
- 301.7701(b)-2 · Closer connection exception.
- 301.7701(b)-3 · Days of presence in the United States that are excluded…
- 301.7701(b)-4 · Residency time periods.
- 301.7701(b)-5 · Coordination with section 877.
- 301.7701(b)-6 · Taxable year.
- 301.7701(b)-7 · Coordination with income tax treaties.
- 301.7701(b)-8 · Procedural rules.
- 301.7701(b)-9 · Effective/applicability dates of §§ 301.7701(b)-1…
- 301.7701(i)-0 · Outline of taxable mortgage pool provisions.
- 301.7701(i)-1 · Definition of a taxable mortgage pool.
- 301.7701(i)-2 · Special rules for portions of entities.
- 301.7701(i)-3 · Effective dates and duration of taxable mortgage pool…
- 301.7701(i)-4 · Special rules for certain entities.
- 301.7704-2 · Transition provisions.
- 301.7705-1 · Certified professional employer organization.
- 301.7705-2 · CPEO certification process.
- 301.7803-1 · Security bonds covering personnel of the Internal Revenue…
- 301.7805-1 · Rules and regulations.
- 301.7811-1 · Taxpayer assistance orders.
- 301.7803-2 · Internal Revenue Service Independent Office of Appeals…
- 301.7803-3 · Requests for referral to the Internal Revenue Service…
- 301.9000-1 · Definitions when used in §§ 301.9000-1 through 301.9000-6.
- 301.9000-2 · Considerations in responding to a request or demand for…
- 301.9000-3 · Testimony authorizations.