[Code of Federal Regulations]
[Title 26, Volume 6]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR1.455-4]

[Page 152-153]
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 1_INCOME TAXES--Table of Contents
 
Sec. 1.455-4  Cessation of taxpayer's liability.

    (a) If a taxpayer has elected to apply the provisions of section 455 
to a trade or business in connection with which

[[Page 153]]

prepaid subscription income is received, and if its liability to furnish 
or deliver a newspaper, magazine, or other periodical ends for any 
reason, then so much of the prepaid subscription income attributable to 
such liability as was not includible in its gross income under section 
455 for preceding taxable years shall be included in its gross income 
for the taxable year in which such liability ends. A taxpayer's 
liability may end, for example, because of the cancellation of a 
subscription. See section 381(c)(4) and the regulations thereunder for 
the treatment of prepaid subscription income in a transaction to which 
section 381(a) applies.
    (b) If a taxpayer who has elected to apply the provisions of section 
455 to a trade or business dies or ceases to exist, then so much of the 
prepaid subscription income attributable to such trade or business which 
was not includible in its gross income under section 455 for preceding 
taxable years shall be included in its gross income for the taxable year 
in which such death or cessation of existence occurs. See section 
381(c)(4) and the regulations thereunder for the treatment of prepaid 
subscription income in a transaction to which section 381(a) applies.

[T.D. 6591, 27 FR 1799, Feb. 27, 1962]