SECTION 3. MODIFICATION TO

REV. PROC. 2018–31

A taxpayer that wants to change its method of accounting under this revenue procedure must follow the automatic

July 9, 2018 204 Bulletin No. 2018–28

change procedures in Rev. Proc. 2018– 31, which is modified to add a new section 12.15 to read as follows: .15 Change to not apply § 263A to replanting costs for lost or damaged cit- rus plants pursuant to § 263A(d)(2)(C) .

(1) Description of change .

(a) In general . This change, as described in Rev. Proc. 2018–35, 2018–28 I.R.B. 204, applies to a taxpayer, other than the owner described in § 263A(d) (2)(A), that: (a) paid or incurred replanting costs of citrus plants after the loss or damage of citrus plants by reason of freezing temperatures, disease, drought, pests, or casualty, as described in § 263A(d) (2)(A); (b) paid or incurred the replanting costs after December 22, 2017, and on or before December 22, 2027; (c) satisfies the ownership test provided in section 12.15(1)(b) of this revenue procedure; and (d) wants to change its method of accounting from applying § 263A to citrus plant replanting costs to not applying § 263A to those costs, pursuant to § 263A(d)(2)(C).

(b) Ownership test . The taxpayer satisfies the ownership test if either: (1) the owner described in § 263A(d)(2)(A) has an equity interest of not less than 50 percent in the replanted citrus plants at all

times during the taxable year in which the taxpayer paid or incurred amounts for replanting costs, and the taxpayer holds any part of the remaining equity interest; or (2) the taxpayer acquired the entirety of the equity interest of the owner described in § 263A(d)(2)(A) in the land on which the lost or damaged citrus plants were located at the time of the loss or damage, and the replanting is on such land.

(2) Certain eligibility rules inapplica- ble . The eligibility rule in section 5.01(1)(f) of Rev. Proc. 2015–13 does not apply to this change.

(3) Section 481(a) adjustment . A taxpayer making a change under this section 12.15 calculates a § 481(a) adjustment by taking into account only amounts paid or incurred after December 22, 2017, and on or before December 22, 2027.

(4) Multiple changes . A taxpayer making both this change and another change in method of accounting in the same year of change must comply with the ordering rules of § 1.263A–7(b)(2).

(5) Designated automatic accounting change number . The designated automatic accounting change number for a change under this section 12.15 is “232.”

(6) Contact information . For further information regarding a change under this section, contact Natasha Mulleneaux at (202) 317-7007 (not a toll-free call).