SECTION 7. EFFECT ON OTHER

DOCUMENTS

Rev. Proc. 2008–52 is modified to add new section 11.07 to the APPENDIX, to read as follows:

.07 Safe harbor methods under § 263A for certain dealerships of motor vehicles .

(1) Description of change . This change applies to a motor vehicle dealership, as defined in section 4 of Rev. Proc. 2010–44 that is within the scope of section 3 of Rev. Proc. 2010–44 and wants to change its method of accounting to (1) treat its sales facility as a retail sales facility or (2) be treated as a reseller without production activities, as described in section 5 of Rev. Proc. 2010–44. A motor vehicle dealership that wants to make an automatic change in method of accounting to use one or both safe harbor methods described in section 5 of Rev. Proc. 2010–44 may make any corresponding changes in the identification of costs subject to § 263A that will be accounted for using the new method (for example, to remove internal profit from inventory costs) or to no longer include negative amounts as additional § 263A costs in the numerator of the simplified resale method formula or the simplified production method formula. However, except as provided in the preceding sentence, a change under this section does not include a change for purposes of recharacterizing “§ 471 costs” as “additional § 263A costs” (or vice versa ) under the simplified resale method or the simplified production method.

(2) Certain scope limitations temporar- ily inapplicable . The scope limitations in

sections 4.02(1) through (4) and (7) of Rev. Proc. 2008–52, as modified and clarified by Rev. Proc. 2009–39, do not apply to a motor vehicle dealership that changes to one or both of the safe harbor methods in section 5 of Rev. Proc. 2010–44 for its first or second taxable year ending after November 9, 2010.

(3) Concurrent automatic changes . A motor vehicle dealership making an automatic change in method of accounting to one or both safe harbor methods described in section 5 of Rev. Proc. 2010–44 and another automatic change in method of accounting under § 263A for the same taxable year may file one Form 3115 to make both changes, provided the dealership enters the designated automatic change numbers for all such changes in Part I on that Form 3115, and complies with the ordering rules of § 1.263A–7(b)(2).

(4) Multiple adjustments . In the event that a motor vehicle dealership is taking into account a § 481(a) adjustment from another accounting method change in addition to the § 481(a) adjustment required by a change to a safe harbor method described in section 5 of Rev. Proc. 2010–44, the § 481(a) adjustments must be taken into account separately. For example, a motor vehicle dealership that changed to comply with § 263A in 2009 and was required to take its § 481(a) adjustment into account over four years must continue to take into account that adjustment over the remainder of that four year § 481(a) adjustment period even though the dealership changed to a safe harbor method described in section 5 of Rev. Proc. 2010–44 in 2010 and has an additional § 481(a) adjustment required by that change.

(5) Designated automatic accounting method change numbers . The designated automatic accounting method change number for a change to treat certain sales facilities as retail sales facilities as described in section 5.01 of Rev. Proc. 2010–44 is “150.” The designated automatic accounting method change number for a change to be treated as a reseller without production activities as described in section 5.02 of Rev. Proc. 2010–44 is “151.”

(6) Contact information . For further information regarding a change under this section, contact Kari Fisher at (202) 622–4970 (not a toll-free call).

December 6, 2010 813 2010–49 I.R.B.

American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5) (ARRA).