Reg. § 1.468A-2 Treatment of electing taxpayer.
(a) In general An eligible taxpayer that elects the application of section pursuant to the rules contained in (an electing taxpayer) is allowed a deduction for the taxable year in which the taxpayer makes a cash payment (or is deemed to make a cash payment as provided in of this section) to a nuclear decommissioning fund and for any taxable year in which a deduction is allowed for a special transfer described in . The amount of the deduction for any taxable year equals the total amount of cash payments made (or deemed made) by the electing taxpayer to a nuclear decommissioning fund (or nuclear decommissioning funds) during such taxable year under this section, plus any amount allowable as a deduction in that taxable year for a special transfer described in . The amount of a special transfer permitted under is not treated as a cash payment for purposes of this , and a taxpayer making a special transfer is allowed a ratable deduction in each taxable year during the remaining useful life of the nuclear power plant for the special transfer. A payment may not be made (or deemed made) to a nuclear decommissioning fund before the first taxable year in which all of the following conditions are satisfied:
(1) The construction of the nuclear power plant to which the nuclear decommissioning fund relates has commenced.
(2) A ruling amount is applicable to the nuclear decommissioning fund (see ).
(b) Limitation on payments to a nuclear decommissioning fund
(1) In general For purposes of of this section, the maximum amount of cash payments made (or deemed made) to a nuclear decommissioning fund under of this section during any taxable year shall not exceed the ruling amount applicable to the nuclear decommissioning fund for such taxable year (as determined under ).
(2) Excess contributions not deductible If the amount of cash payments made (or deemed made) to a nuclear decommissioning fund during any taxable year exceeds the limitation of of this section, the excess is not deductible by the electing taxpayer. In addition, see for rules which provide that the Internal Revenue Service may disqualify a nuclear decommissioning fund if the amount of cash payments made (or deemed made) to a nuclear decommissioning fund during any taxable year exceeds the limitation of of this section.
(3) Special transfer disregarded The amount of a special transfer permitted under is not treated as a cash payment for purposes of this .
(c) Deemed payment rules
(1) In general The amount of any cash payment made by an electing taxpayer to a nuclear decommissioning fund on or before the 15th day of the third calendar month after the close of any taxable year (the deemed payment deadline date) shall be deemed made during such taxable year if the electing taxpayer irrevocably designates the amount as relating to such taxable year on its timely filed Federal income tax return for such taxable year (see and for rules relating to such designation).
(2) Cash payment by customer The amount of any cash payment made by a customer of an electing taxpayer to a nuclear decommissioning fund of such electing taxpayer shall be deemed made by the electing taxpayer if the amount is included in the gross income of the electing taxpayer in the manner prescribed by section and .
(d) Treatment of distributions
(1) In general Except as otherwise provided in of this section, the amount of any actual or deemed distribution from a nuclear decommissioning fund shall be included in the gross income of the electing taxpayer for the taxable year in which the distribution occurs. The amount of any distribution of property equals the fair market value of the property on the date of the distribution. See and for rules relating to the deemed distribution of the assets of a nuclear decommissioning fund in the case of a disqualification or termination of the fund. A distribution from a nuclear decommissioning fund shall include an expenditure from the fund or the use of the fund's assets—
(i) To satisfy, in whole or in part, the liability of the electing taxpayer for decommissioning costs of the nuclear power plant to which the fund relates; and
(ii) To pay administrative costs and other incidental expenses of the fund.
(2) Exceptions to inclusion in gross income
(i) Payment of administrative costs and incidental expenses The amount of any payment by a nuclear decommissioning fund for administrative costs or other incidental expenses of such fund (as defined in ) shall not be included in the gross income of the electing taxpayer unless such amount is paid to the electing taxpayer (in which case the amount of the payment is included in the gross income of the electing taxpayer under section ).
(ii) Withdrawals of excess contributions The amount of a withdrawal of an excess contribution (as defined in ) by an electing taxpayer pursuant to the rules of shall not be included in the gross income of the electing taxpayer. See of this section, which provides that the payment of such amount to the nuclear decommissioning fund is not deductible by the electing taxpayer.
(iii) Actual distributions of amounts included in gross income as deemed distributions If the amount of a deemed distribution is included in the gross income of the electing taxpayer for the taxable year in which the deemed distribution occurs, no further amount is required to be included in gross income when the amount of the deemed distribution is actually distributed by the nuclear decommissioning fund. The amount of a deemed distribution is actually distributed by a nuclear decommissioning fund as the first actual distributions are made by the nuclear decommissioning fund on or after the date of the deemed distribution.
(e) Deduction when economic performance occurs An electing taxpayer using an accrual method of accounting is allowed a deduction for nuclear decommissioning costs no earlier than the taxable year in which economic performance occurs with respect to such costs (see section ). The amount of nuclear decommissioning costs that is deductible under this is determined without regard to section (see ). A deduction is allowed under this whether or not a deduction was allowed with respect to such costs under section and of this section for an earlier taxable year.
[T.D. 9512, 75 FR 80701, Dec. 23, 2010]