SECTION 6. TERMS AND

CONDITIONS

.01 In General. An adoption, change, or retention in annual accounting period filed under this revenue procedure must be made pursuant to the terms and conditions provided in this revenue procedure.

.02 Short Period Tax Return. The taxpayer generally must file a federal income tax return for the short period required to effect a change by the due date of that return, including extensions, in accordance with § 1.443–1. For a change to or from a 52–53-week taxable year that results in a short period of 359 days or more, or six days or less, the tax computation under

2001–23 I.R.B. 1319 June 4, 2001

permitted taxable year. Taxpayers qualifying under section 4 of this revenue procedure may request automatic approval for the change under the provisions of this revenue procedure. Other taxpayers must request approval under Rev. Proc. 2001–XX. .06 Changes in Ownership Taxable Year. An S corporation or electing S corporation that adopts, changes to, or retains an ownership taxable year under this revenue procedure must change to a permitted taxable year, or request approval to retain its current taxable year, if, as of the first day of any taxable year, its ownership taxable year changes. S corporations qualifying under section 4 of this revenue procedure may request automatic approval for the change or retention under the provisions of this revenue procedure. Other taxpayers must request approval under Rev. Proc. 2001–XX.

.07 52–53-week Taxable Years . If applicable, the taxpayer must comply with § 1.441–2(e) (relating to the timing of taking items into account in those cases where the taxable year of a pass-through entity or PSC ends with reference to the same calendar month as one or more of its partners or shareholders or employee-owners).

.08 Net Operating Losses (NOLs) . Solely in the case of a PSC changing to a natural business year, if the PSC has an NOL in the short period required to effect the change, the PSC may not carry the NOL back but must carry it over in accordance with the provisions of § 172 beginning with the first taxable year following the short period. However, the short period NOL is carried back or carried over in accordance with § 172 if it is either (a) $50,000 or less, or (b) results from a short period of 9 months or longer and is less than the NOL for a full 12-month period beginning with the first day of the short period.

.09 General Business Credits . Solely in the case of a PSC changing to a natural business year, if there is an unused general business credit or any other unused credit generated in the short period, the PSC must carry that unused credit forward. An unused credit from the short period may not be carried back.