                                 CODE OF VIRGINIA

ACCOUNTING (§ 58.1-380)

A. An estate and trust taxable year under this chapter shall be the same as its
taxable year for federal income tax purposes.

B. If a taxpayer&#8217;s taxable year is changed for federal income tax
purposes, its taxable year for purposes of this chapter shall be similarly
changed. If a taxable year of less than twelve months results from a change of
taxable year, the Virginia taxable income shall be prorated under regulations of
the Department.

C. A taxpayer&#8217;s method of accounting under this chapter shall be the same
as its method of accounting for federal income tax purposes. In the absence of
any method of accounting for federal income tax purposes, Virginia taxable
income shall be computed under such method as in the opinion of the Tax
Commissioner clearly reflects income.

D. If a taxpayer&#8217;s method of accounting is changed for federal income tax
purposes, its method of accounting for purposes of this chapter shall be
similarly changed. If a taxpayer&#8217;s method of accounting is changed, other
than from an accrual to an installment method, any additional tax which results
from adjustments determined to be necessary solely by reason of the change shall
not be greater than if such adjustments were ratably allocated and included for
the taxable year of the change and the preceding taxable years, not in excess of
two, during which the taxpayer used the method of accounting from which the
change is made. If a taxpayer&#8217;s method of accounting is changed from an
accrual to an installment method, any additional tax for the year of such change
of method and for any subsequent year which is attributable to the receipt of
installment payments properly accrued in a prior year, shall be reduced by the
portion of tax for any prior taxable year attributable to the accrual of such
installment payments, in accordance with regulations of the Department.

E. In computing a taxpayer&#8217;s Virginia taxable income for any taxable year
under a method of accounting different from the method under which the
taxpayer&#8217;s Virginia taxable income was computed, there shall be taken into
account those adjustments which are determined, under regulations prescribed by
the Department of Taxation, to be necessary solely by reason of change in order
to prevent amounts from being duplicated or omitted.

F. Notwithstanding any other provisions of this section, any accounting
adjustments made for federal income tax purposes for any taxable year shall be
applied in computing the taxpayer&#8217;s taxable income for such year.

HISTORY: Code 1950, § 58-151.061; 1971, Ex. Sess., c. 171; 1984, c. 675.