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(d) Effective date.--
(1) In General.--Except as provided in
this subsection, the amendments made by this
section shall apply to costs incurred after
December 31, 1986, in taxable years ending
after such date.
(2) Special Rule For Inventory
Property.--In the case of any property which
is inventory in the hands of the taxpayer–-
(A) IN GENERAL--The amendments
made by this section shall apply to
taxable years beginning after
December 31, 1986.
* * * * * * *
Petitioner focuses on the fact that section 803(d)(2)(A) of
the TRA provides explicitly that the amendments contained therein
“shall” apply to taxable years beginning in or after 1987 and
asserts that this language means that the “year of change” for
purposes of section 481 is the year for which it was required to
change its method of accounting to conform to the UNICAP rules
rather than the first year for which it actually made the change.
Respondent argues that the “year of change” for purposes of
section 481 is the year in which the change actually occurred;
i.e., the subject year.
We agree with respondent. Section 481(a)(1) provides that
where in computing a taxpayer's taxable income the computation is
under a method of accounting different from the method under
which the taxpayer's income for the preceding taxable year was
computed, there shall be taken into account those adjustments
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