SECTION 13. SHORT-TERM

OBLIGATIONS (§ 1281)

to § 1281 must include in gross income an amount equal to the sum of the daily portions of the acquisition discount or OID, whichever is applicable, on the obligation for each day during the taxable year that the obligation is held by the holder. See § 1283(b), as modified by § 1283(c), to determine the daily portions of acquisition discount or OID. In addition, § 1281(a) requires the holder to include in gross income any stated interest that is payable on the short-term obligation (other than stated interest taken into account to determine the amount of the acquisition discount or OID) as it accrues.

(2) Section 481(a) adjustment pe- riod. A taxpayer must take the entire § 481(a) adjustment into account in computing taxable income for the year of change.

.02 Stated interest on short-term loans of cash method banks in the Eighth Cir- cuit.

(1) Description of change and scope.

puting taxable income for the year of change.

(3) No ruling protection. If the Service is later successful in further litigation on this issue in other circuits, or there is a change in law, then cash method banks in the Eighth Circuit may be required to use an accrual method of accounting for any taxable year not barred by the statute of limitations.

26 CFR 601.602: Tax forms and instructions. (Also Part I, §§ 138, 220, 408, 408A, 529, 530, 1441, 1442, 1443, 3402, 3405, 3406, 6011, 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S; 1.408–7, 1.408A–7, 1.1461–1, 1.1461–2, 31.3402(q)–1, 31.3404(r)–1, 31.3405(c)–1, 35.3405–1, 31.3406(a)–1, 31.3406(g)–2, 35a.3406–2, 1.6011–1, 1.6011–3, 1.6041–1, 7.6041–1, 1.6041A–1, 1.6042–2, 1.6044–2, 1.6045–1, 1.6045–2, 1.6045–4, 1.6049–4, 1.6050A–1, 1.6050E–1, 1.6050H–1, 1.6050J–1T, 1.6050N–1, and 1.6050P–1.)

Rev. Proc. 99–50