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regulations, effective generally for taxable years beginning
after December 31, 1986, were promulgated in 1993 pursuant to the
Commissioner's authority found in section 7805(a) to "prescribe
all needful rules and regulations for the enforcement of this
title". T.D. 8514, 1994-1 C.B. 141; sec. 1.448-1(i)(1), Income
Tax Regs.11 The final regulations interpreting section
10 (...continued)
* * * * * * *
(iii) Cessation of trade or business. If the taxpayer
ceases to engage in the trade or business to which the
section 481(a) adjustment relates, or if the taxpayer
operating the trade or business terminates existence, and
such cessation or termination occurs prior to the expiration
of the adjustment period described in paragraph (g)(2)(i) or
(ii) of this section, the taxpayer must take into account, in
the taxable year of such cessation or termination, the
balance of the adjustment not previously taken into account
in computing taxable income. For purposes of this paragraph
(g)(3)(iii), the determination as to whether a taxpayer has
ceased to engage in the trade or business to which the
section 481(a) adjustment relates, or has terminated its
existence, is to be made under the principles of �1.446-
1(e)(3)(ii) and its underlying administrative procedures.
11 Sec. 1.448-1(i), Income Tax Regs., provides in pertinent
part as follows:
(i) Effective date. (1) In general. Except as
provided in paragraph (i)(2), (3), and (4) of this section,
this section applies to any taxable year beginning after
December 31, 1986.
* * * * * * *
(4) Transitional rule for paragraphs (g) and (h)
of this section. To the extent the provisions of
paragraphs (g) and (h) of this section were not
reflected in paragraphs (g) and (h) of �1.448-1T (as
(continued...)
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