Section 481(a) Adjustments Clause Samples
A Section 481(a) adjustment is a tax provision that requires a taxpayer to account for changes in accounting methods by adjusting taxable income to prevent duplication or omission of income. When a business changes its method of accounting—such as switching from cash to accrual basis—it must calculate the cumulative effect of the change on prior years and adjust its current year's taxable income accordingly. This adjustment ensures that all income is properly reported and taxed once, thereby maintaining consistency and fairness in tax reporting and preventing either over- or under-taxation due to the change in accounting methods.
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Section 481(a) Adjustments. The Parties agree that, prior to the Closing Date, Pinnacle shall file an application under Revenue Procedure 2015-13 (as modified by Revenue Procedure 2015-33) for consent of the Commissioner to change Pinnacle’s method of accounting for depreciation of the Barges under section 168(a) of the Code to a method of depreciating the Barges over a period of 39 years. Further, in the event that Pinnacle obtains the IRS Ruling with respect to the Riverboats, the Parties agree that Pinnacle shall promptly file an application for consent of the Commissioner to change Pinnacle’s method of accounting for depreciation of the Riverboats under section 168(a) of the Code to a method of depreciating the Riverboats over a period of 39 years. Any adjustments required under Section 481(a) of the Code (and any similar provision of any U.S. state or local jurisdiction) with respect to the changes in method of accounting referred to in this Section 6.02 are collectively referred to as the “Section 481(a) Adjustments”. The Parties agree that OpCo shall cause Pinnacle to make an “eligible acquisition transaction election” on the tax return filed with respect to the final Pre-Closing Period pursuant to Section 7.03(3)(d) of Revenue Procedure 2015-13 with respect to each of the Section 481(a) Adjustments.
Section 481(a) Adjustments. The transactions contemplated by this Agreement will not accelerate any Code Section 481(a) amount under Rev. Proc. 92-20, Rev. Proc. 97-27 or any similar subsequent ruling.
Section 481(a) Adjustments. The Company has not agreed nor is it required to make any adjustment that is expected to result in income to the Company for any taxable period ending after the Closing Date under Code Section 481(a) by reason of a change in accounting method or otherwise.