Par. 5. In Sec. 1.475(c)-2, paragraph (d) is added to read as follows:
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(d) Inventory--(1) Nonfinancial customer paper is generally not marked to market under section 475. Except as provided in paragraph (d)(3) of this section, nonfinancial customer paper (as defined in section 475(c)(4)(B)) is not a security even if it is inventory.
(2) Treatment of nonfinancial customer paper under other sections of the Internal Revenue Code. For nonfinancial customer paper that is not a security, the mark-to-market method of accounting and the lower- of-cost-or-market method of accounting are not permissible methods of accounting. See Secs. 1.446-1(c)(2)(iii) and 1.471-12.
(3) Nonfinancial customer paper treated as inventory. [Reserved]