[Code of Federal Regulations]
[Title 26, Volume 6]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.455-4]

[Page 152]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.455-4  Cessation of taxpayer's liability.

    (a) If a taxpayer has elected to apply the provisions of section 455 
to a trade or business in connection with which prepaid subscription 
income is received, and if its liability to furnish or deliver a 
newspaper, magazine, or other periodical ends for any reason, then so 
much of the prepaid subscription income attributable to such liability 
as was not includible in its gross income under section 455 for 
preceding taxable years shall be included in its gross income for the 
taxable year in which such liability ends. A taxpayer's liability may 
end, for example, because of the cancellation of a subscription. See 
section 381(c)(4) and the regulations thereunder for the treatment of 
prepaid subscription income in a transaction to which section 381(a) 
applies.
    (b) If a taxpayer who has elected to apply the provisions of section 
455 to a trade or business dies or ceases to exist, then so much of the 
prepaid subscription income attributable to such trade or business which 
was not includible in its gross income under section 455 for preceding 
taxable years shall be included in its gross income for the taxable year 
in which such death or cessation of existence occurs. See section 
381(c)(4) and the regulations thereunder for the treatment of prepaid 
subscription income in a transaction to which section 381(a) applies.

[T.D. 6591, 27 FR 1799, Feb. 27, 1962]