Code of the District of Columbia

Subchapter IV. Accounting Periods, Installment Sales, and Inventories.


§ 47–1804.01. Accounting periods — Computation of income.

The net income shall be computed upon the basis of the taxpayer’s annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Mayor does clearly reflect the income. If the taxpayer’s annual accounting period is other than a fiscal year as defined in § 47-1801.04(8) or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year. If the taxpayer makes a federal income tax return, his income shall be computed, for the purposes of this subchapter, on the basis of the same calendar or fiscal year as in such federal income tax return, if the basis is accepted and approved by the Commissioner of Internal Revenue.


(July 16, 1947, 61 Stat. 339, ch. 258, art. I, title IV, § 1; Mar. 6, 1979, D.C. Law 2-158, § 4, 25 DCR 7002; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.1.

1973 Ed., § 47-1561.

Section References

This section is referenced in § 47-1804.02.

Effect of Amendments

D.C. Law 13-126, rewrote subd. (28A), which previously read:

“The term ‘Internal Revenue Code of 1986’ means the Internal Revenue Code of 1986 (100 Stat. 2085; 26 U.S.C. 1 et seq.), as amended through August 20, 1996. The provisions of the Internal Revenue Code of 1986 shall be effective on the same dates that they are effective for Federal tax purposes.”


§ 47–1804.02. Accounting periods — Period in which items of gross income included.

The amount of all items of gross income shall be included in the gross income for the taxable year in which received by the taxpayer unless, under methods of accounting permitted under § 47-1804.01, any such amounts are to be properly accounted for as of a different period. In the case of death of a taxpayer on the cash basis, no amount will be accrued on his final return; and on the accrual basis, amounts (except amounts includible in computing a partner’s net income) accrued only by reason of the death of the taxpayer shall not be included in computing net income for the period in which falls the date of the taxpayer’s death, but such amounts shall be included in the income of the person receiving such amounts by inheritance or survivorship from the decedent.


(July 16, 1947, 61 Stat. 339, ch. 258, art. I, title IV, § 2; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.2.

1973 Ed., § 47-1561a.


§ 47–1804.03. Accounting periods — Period for which deductions and credits taken.

The deductions and credits provided for in this chapter shall be taken for the taxable year in which “paid or accrued” or “paid or incurred”, dependent upon the method of accounting upon the basis of which the net income is computed unless, in order to clearly reflect the income, the deductions or credits should be taken as of a different period. In the case of death of a taxpayer on the cash basis, no amount will be allowed as a deduction which was accrued up to the date of the taxpayer’s death; and on the accrual basis, no amount (except amounts includible in computing a partner’s net income) accrued only by reason of the death of the taxpayer shall be included in computing net income for the period in which falls the date of the taxpayer’s death but such amounts shall be deductible by the estate or other person who paid them or is liable for their payment.


(July 16, 1947, 61 Stat. 340, ch. 258, art. I, title IV, § 3; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.3.

1973 Ed., § 47-1561b.


§ 47–1804.04. Income from installment sales.

If a person reports any portion of his income from installment sales for federal income tax purposes under § 453 of the Internal Revenue Code of 1986 (§ 453 of Title 26, United States Code ) and as the same may hereafter be amended and if such income is subject to tax under this chapter, he may report such income under this chapter in the same manner and upon the same basis as the same was reported by him for federal income tax purposes, if such method of reporting is accepted and approved by the Commissioner of Internal Revenue.


(July 16, 1947, 61 Stat. 340, ch. 258, art. I, title IV, § 4; May 27, 1949, 63 Stat. 131, ch. 146, title IV, § 410; June 24, 1987, D.C. Law 7-9, § 2(g), 34 DCR 3283; Oct. 1, 1987, D.C. Law 7-29, § 2(d), 34 DCR 5097; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.4.

1973 Ed., § 47-1561c.


§ 47–1804.05. Inventories.

Whenever in the opinion of the Mayor the use of inventories is necessary in order to properly determine the income of any taxpayer, inventories shall be taken by such taxpayer upon such basis as the Mayor may prescribe as conforming as nearly as may be to the best accounting practice in the trade or business and as most clearly reflecting the income.


(July 16, 1947, 61 Stat. 340, ch. 258, art. I, title IV, § 5; Mar. 6, 1979, D.C. Law 2-158, § 4, 25 DCR 7002; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.5.

1973 Ed., § 47-1561d.


§ 47–1804.06. Authority to reject returns.

Notwithstanding any other provisions of this chapter, the Mayor is hereby authorized to reject any return of income reported on a cash basis where, in his opinion, the net income of the taxpayer is not properly reflected and cannot be determined on such basis, and to require the return to be filed on such a basis as in his opinion will properly reflect the net income of the taxpayer.


(July 16, 1947, 61 Stat. 340, ch. 258, art. I, title IV, § 6; Mar. 6, 1979, D.C. Law 2-158, § 4, 25 DCR 7002; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575.)

Prior Codifications

1981 Ed., § 47-1804.6.

1973 Ed., § 47-1561e.


§ 47–1804.07. Amount.

(a) Fractional parts of dollar. — With respect to any amount required to be shown on a return, document or statement filed under this chapter, if such amount is other than a whole-dollar amount, either the fractional part of a dollar shall be disregarded unless it amounts to one-half dollar or more, in which case the amount (determined without regard to the fractional part of the dollar) shall be increased by $1.

(b) Repealed.

(c) Inapplicability to computation. — The provisions of subsections (a) and (b) of this section shall not be applicable to items which must be taken into account in making the computations necessary to determine the amount required to be shown on a return, document or statement filed under this chapter, but shall be applicable only to such final amount.


(July 16, 1947, 61 Stat. 339, § 7; as added June 11, 1982, D.C. Law 4-118, § 105, 29 DCR 1770; enacted, Apr. 9, 1997, D.C. Law 11-254, § 2, 44 DCR 1575; June 9, 2001, D.C. Law 13-305, § 402(a), 48 DCR 334.)

Prior Codifications

1981 Ed., § 47-1804.7.

Effect of Amendments

D.C. Law 13-305 repealed subsec. (b) which had read:

“(b) Election not to use whole-dollar amounts.— Any person making a return, statement or other document shall be allowed to make such return, statement or document without regard to subsection (a) of this section.”

Editor's Notes

Section 410(a) of D.C. Law 13-305 provided: “(a) Section 402(a) applies for all tax years beginning after December 31, 2001.”