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IRS and Treasury release Section 451 final regulations

December 2020


The IRS and Treasury have released regulations under Section 451(b) and (c) and Section 1275, finalizing regulations proposed on September 9, 2019.  Section 451(b), as added by the 2017 tax reform act, provides that an accrual-method taxpayer must recognize an item as gross income under the all-events test no later than when the item is taken into account as revenue in the taxpayer’s applicable financial statement.  Section 451(c) allows taxpayers to elect a limited deferral for certain advance payments.  Section 1275 provides special rules for debt instruments.  PwC will publish a detailed analysis of the final regulations in early January. 

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Christine Turgeon

Partner, Federal Tax Services Leader, PwC US

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