### Question
How is the term replacement period defined?


### Answer
The term **replacement period** is defined in *26 U.S.C. § 473* as the following:

> the shorter of—


(A) the period of the 3 taxable years following the liquidation year, or


(B) the period specified by the Secretary in a notice published in the Federal Register with respect to that qualified inventory interruption

#### Citation:
  - *26 U.S.C. § 473*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter E-Accounting Periods and Methods of Accounting > PART II-METHODS OF ACCOUNTING > Subpart D-Inventories**

