26 USC § 859 - Adoption of annual accounting period

---
identifier: "/us/usc/t26/s859"
source: "usc"
legal_status: "official_prima_facie"
title: "26 USC § 859 - Adoption of annual accounting period"
title_number: 26
title_name: "INTERNAL REVENUE CODE"
section_number: "859"
section_name: "Adoption of annual accounting period"
chapter_number: 1
chapter_name: "NORMAL TAXES AND SURTAXES"
subchapter_number: "M"
subchapter_name: "Regulated Investment Companies and Real Estate Investment Trusts"
part_number: "II"
part_name: "REAL ESTATE INVESTMENT TRUSTS"
positive_law: false
currency: "119-84"
last_updated: "2026-04-17"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Added Pub. L. 94–455, title XVI, § 1604(i)(1), Oct. 4, 1976, 90 Stat. 1752, § 860; renumbered § 859 and amended Pub. L. 95–600, title III, § 362(d)(6), title VII, § 701(t)(1), Nov. 6, 1978, 92 Stat. 2852, 2911; Pub. L. 99–514, title VI, § 661(c), Oct. 22, 1986, 100 Stat. 2300.)"
---


# § 859. Adoption of annual accounting period

**(a)** **General rule** For purposes of this subtitle—

Paragraph (2) shall not apply to a corporation, trust, or association which was considered to be a real estate investment trust for any taxable year beginning on or before October 4, 1976.

**(1)** a real estate investment trust shall not change to any accounting period other than the calendar year, and

**(2)** a corporation, trust, or association may not elect to be a real estate investment trust for any taxable year beginning after October 4, 1976, unless its accounting period is the calendar year.

**(b)** **Change of accounting period without approval** Notwithstanding section 442, an entity which has not engaged in any active trade or business may change its accounting period to a calendar year without the approval of the Secretary if such change is in connection with an election under section 856(c).

---

**Source Credit**: (Added Pub. L. 94–455, title XVI, § 1604(i)(1), Oct. 4, 1976, 90 Stat. 1752, § 860; renumbered § 859 and amended Pub. L. 95–600, title III, § 362(d)(6), title VII, § 701(t)(1), Nov. 6, 1978, 92 Stat. 2852, 2911; Pub. L. 99–514, title VI, § 661(c), Oct. 22, 1986, 100 Stat. 2300.)

## Editorial Notes

### Prior Provisions

A prior section 859, added , , ; amended , , , related to a deduction for deficiency dividends, prior to repeal by , , . See .

### Amendments

1986— designated existing provisions as subsec. (a) and added subsec. (b).

1978—, designated existing provisions as par. (1), substituted “change to any accounting period” for “change to or adopt any annual accounting period”, and added par. (2) and provision for nonapplicability of par. (2) to a real estate investment trust for any taxable year beginning on or before .

## Statutory Notes and Related Subsidiaries

### Effective Date of 1986 Amendment

Amendment by  applicable to taxable years beginning after , see , set out as a note under .

### Effective Date of 1978 Amendment

Repeal of prior  and redesignation of  as this section by  applicable with respect to determinations (as defined in ) after , see , set out as an Effective Date note under .

> “The amendments made by this subsection [amending this section and sections 275, 856, 6212, and 6501 of this title] shall take effect on
> 
> .”

, , , provided that: