Part III. Administrative, Procedural, and Miscellaneous

counting period, the taxable income for the short period must be placed on an annual basis by multiplying the income by 12 and dividing the result by the number of months in the short period. Unless §§ 443(b)(2) and 1.443–1(b)(2) apply, the tax for the short period is the same part of the tax computed on an annual basis as the number of months in the short period is of 12 months.

.05 Sections 1.852–3(e) and 1.857–2(a)(4) provide that the taxable income of a regulated investment company (RIC) and a real estate investment trust (REIT) are computed without regard to § 443(b). Thus, taxable income for a period of less than 12 months is not placed on an annual basis even though such short taxable year results from a change of annual accounting period.