For the property valued at Rs 11.58 crore at the time of purchase, the actor took an annual ratable
rental value of Rs 4 lakh.
72-18 requires a ratable
disallowance of interest expense incurred in the general operation of a dealer business, to the extent that the business involves the acquisition and holding of exempt obligations.
The regulations may provide that income realized before the change date from discrete sales of assets would be excluded from the ratable allocation and could be offset without limit by pre-change losses.
Clearly, the ratable allocation rule prescribed in section 382(b)(3) for an ownership change that does not trigger an automatic closing of the year is a rule of administrative convenience.
The regulations maintain the general rule of ratable allocation but allow for a closing of the books election made on a timely filed return.
Examples 2 and 3 demonstrate the differing results that may be obtained if a loss corporation elects a closing of the books rather than a daily ratable allocation.
as is not in excess of his ratable
share of the undistributed earnings and profits [E&P] of the corporation .
allocation may be convenient, it can give rise to distorted results if large taxable gains or losses occur in either the prechange or postchange period but are allocated pro rata within the year.
736(b) payments to be made to a partner is fixed, however, the partner may determine the amount of gain or loss attributable to each payment by applying a ratable
portion of his basis in the partnership interest to each payment.
Payment method: The payment method applies to all taxpayers that have not elected the ratable
accrual method and that have not elected the recurring item exception.
It will be important to identify at the top of the statement, "REQUEST TO CHANGE TO THE RATABLE
ACCRUAL METHOD FOR REAL PROPERTY TAXES UNDER REV.