26 U.S.C. § 446
General rule for methods of accounting
# (a) General rule
Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.
# (b) Exceptions
If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary, does clearly reflect income.
# (c) Permissible methods
Subject to the provisions of subsections (a) and (b), a taxpayer may compute taxable income under any of the following methods of accounting— (1) the cash receipts and disbursements method; (2) an accrual method; (3) any other method permitted by this chapter; or (4) any combination of the foregoing methods permitted under regulations prescribed by the Secretary.
# (d) Taxpayer engaged in more than one business
A taxpayer engaged in more than one trade or business may, in computing taxable income, use a different method of accounting for each trade or business.
# (e) Requirement respecting change of accounting method
Except as otherwise expressly provided in this chapter, a taxpayer who changes the method of accounting on the basis of which he regularly computes his income in keeping his books shall, before computing his taxable income under the new method, secure the consent of the Secretary.
# (f) Failure to request change of method of accounting
If the taxpayer does not file with the Secretary a request to change the method of accounting, the absence of the consent of the Secretary to a change in the method of accounting shall not be taken into account— (1) to prevent the imposition of any penalty, or the addition of any amount to tax, under this title, or (2) to diminish the amount of such penalty or addition to tax.
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Cited by 114
- 26 CFR § 1.1012-1 — Basis of property.
- 26 CFR § 1.1016-3 — Exhaustion, wear and tear, obsolescence, amortization, and depletion for periods since February 28, 1913.
- 26 CFR § 1.1362-3 — Treatment of S termination year.
- 26 CFR § 1.1377-1 — Pro rata share.
- 26 CFR § 1.1400L(b)-1 — Additional first year depreciation deduction for qualified New York Liberty Zone property.
- 26 CFR § 1.1502-13 — Intercompany transactions.
- 26 CFR § 1.1502-17 — Methods of accounting.
- 26 CFR § 1.1502-68 — Additional first year depreciation deduction for property acquired and placed in service after September 27, 2017.
- 26 CFR § 1.1502-76 — Taxable year of members of group.
- 26 CFR § 1.162-12 — Expenses of farmers.
- 26 CFR § 1.162-3 — Materials and supplies.
- 26 CFR § 1.162-4 — Repairs.
Show 48 more
- 26 CFR § 1.163-12 — Deduction of original issue discount on instrument held by related foreign person.
- 26 CFR § 1.166-1 — Bad debts.
- 26 CFR § 1.166-2 — Evidence of worthlessness.
- 26 CFR § 1.167(a)-11 — Depreciation based on class lives and asset depreciation ranges for property placed in service after December 31, 1970.
- 26 CFR § 1.167(a)-12 — Depreciation based on class lives for property first placed in service before January 1, 1971.
- 26 CFR § 1.167(a)-4 — Leased property.
- 26 CFR § 1.167(b)-0 — Methods of computing depreciation.
- 26 CFR § 1.167(d)-1 — Agreement as to useful life and rates of depreciation.
- 26 CFR § 1.167(e)-1 — Change in method.
- 26 CFR § 1.167(l)-1 — Limitations on reasonable allowance in case of property of certain public utilities.
- 26 CFR § 1.168(i)-1 — General asset accounts.
- 26 CFR § 1.168(i)-4 — Changes in use.
- 26 CFR § 1.168(i)-6 — Like-kind exchanges and involuntary conversions.
- 26 CFR § 1.168(i)-7 — Accounting for MACRS property.
- 26 CFR § 1.168(i)-8 — Dispositions of MACRS property.
- 26 CFR § 1.168(k)-1 — Additional first year depreciation deduction.
- 26 CFR § 1.168(k)-2 — Additional first year depreciation deduction for property acquired and placed in service after September 27, 2017.
- 26 CFR § 1.170A-9 — Definition of section 170(b)(1)(A) organization.
- 26 CFR § 1.179-5 — Time and manner of making election.
- 26 CFR § 1.179B-1T — Deduction for capital costs incurred in complying with Environmental Protection Agency sulfur regulations (temporary).
- 26 CFR § 1.195-1 — Election to amortize start-up expenditures.
- 26 CFR § 1.197-2 — Amortization of goodwill and certain other intangibles.
- 26 CFR § 1.248-1 — Election to amortize organizational expenditures.
- 26 CFR § 1.263(a)-1 — Capital expenditures; in general.
- 26 CFR § 1.263(a)-2 — Amounts paid to acquire or produce tangible property.
- 26 CFR § 1.263(a)-3 — Amounts paid to improve tangible property.
- 26 CFR § 1.263(a)-4 — Amounts paid to acquire or create intangibles.
- 26 CFR § 1.263A-1 — Uniform capitalization of costs.
- 26 CFR § 1.263A-15 — Effective dates, transitional rules, and anti-abuse rule.
- 26 CFR § 1.263A-2 — Rules relating to property produced by the taxpayer.
- 26 CFR § 1.263A-3 — Rules relating to property acquired for resale.
- 26 CFR § 1.263A-4 — Rules for property produced in a farming business.
- 26 CFR § 1.263A-9 — The avoided cost method.
- 26 CFR § 1.267(a)-1 — Deductions disallowed.
- 26 CFR § 1.267(a)-3 — Deduction of amounts owed to related foreign persons.
- 26 CFR § 1.280F-6 — Special rules and definitions.
- 26 CFR § 1.338-1 — General principles; status of old target and new target.
- 26 CFR § 1.381(c)(4)-1 — Method of accounting.
- 26 CFR § 1.381(c)(5)-1 — Inventory method.
- 26 CFR § 1.404(a)-14 — Special rules in connection with the Employee Retirement Income Security Act of 1974.
- 26 CFR § 1.441-1 — Period for computation of taxable income.
- 26 CFR § 1.446-1 — General rule for methods of accounting.
- 26 CFR § 1.446-4 — Hedging transactions.
- 26 CFR § 1.446-6 — REMIC inducement fees.
- 26 CFR § 1.446-7 — Net asset value method for certain money market fund shares.
- 26 CFR § 1.448-1T — Limitation on the use of the cash receipts and disbursements method of accounting (temporary).
- 26 CFR § 1.448-2 — Limitation on the use of the cash receipts and disbursements method of accounting for taxable years beginning after December 31, 2017.
- 26 CFR § 1.448-3 — Nonaccrual of certain amounts by service providers.
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