[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 122-123]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.6016-4  Short taxable year.

    (a) Requirement of declaration. No declaration may be made for a 
period of more than 12 months. For purposes of

[[Page 123]]

this section a taxable year of 52 or 53 weeks, in the case of a 
corporation which computes its taxable income in accordance with the 
election permitted by section 441(f), shall be deemed a period of 12 
months. For special rules affecting the time for filing declarations and 
paying estimated tax by such corporation, see paragraph (b) of Sec.  
1.441-2. A separate declaration is required where a corporation is 
required to submit an income tax return for a period of less than 12 
months, but only if such short period ends on or after December 31, 
1955. However, no declaration is required if the short taxable year:
    (1) Begins on or before December 31, 1963, and is:
    (i) A period of less than 9 months, or
    (ii) A period of 9 or more months but less than 12 months and the 
requirements of section 6016(a) are not met before the 1st day of the 
last month in the short taxable year, or
    (2) Begins after December 31, 1963, and is:
    (i) A period of less than 4 months, or
    (ii) A period of 4 or more months but less than 12 months and the 
requirements of section 6016(a) are not met before the 1st day of the 
last month in the short taxable year.
    (b) Income placed on an annual basis. In cases where the short 
taxable year results from a change of annual accounting period, for the 
purpose of determining whether the anticipated income for a short 
taxable year will result in an estimated tax liability requiring the 
filing of a declaration, such income shall be placed on an annual basis 
in the manner prescribed in section 443(b)(1). If a tax computed on such 
annualized income exceeds the sum of $100,000 and any credits under part 
IV, of subchapter A, chapter 1 of the Code, the estimated tax shall be 
the same part of the excess so computed as the number of months in the 
short period is of 12 months. Thus, for example, a corporation which 
changes from a calendar year basis to a fiscal year basis beginning 
October 1, 1956, will have a short taxable year beginning January 1, 
1956, and ending September 30, 1956. If on or before August 31, 1956, 
the taxpayer anticipates that it will have income of $264,000 for the 9-
month taxable year the estimated tax is computed as follows:

(1) Anticipated taxable income for 9 months.................    $264,000
(2) Annualized income ($264,000x12/9).......................     352,000
(3) Tax liability on item (2)...............................     177,540
(4) Item (3) reduced by $100,000 (there are no credits under      77,540
 part IV, subchapter A, chapter 1 of the Code)..............
(5) Estimated tax for 9-month period ($77,540x9/12).........      58,155



Since the tax liability on the annualized income is in excess of 
$100,000, a declaration is required to be filed, reporting an estimated 
tax of $58,155 for the 9-month taxable period. This paragraph has no 
application where the short taxable year does not result from a change 
in the taxpayer's annual accounting period.

[T.D. 6500, 25 FR 12108, Nov. 26, 1960, as amended by T.D. 6768, 29 FR 
14922, Nov. 4, 1964]