(a)(3), except that such subsection shall be applied for purposes of this subparagraph by substituting $500,000,000 for the dollar amount otherwise in effect for such taxable year under such paragraph. (C) Definitions Any term used in this paragraph which is also used in section 877A shall have the same meaning as when used in such section. 496. Special rules for taxpayers entering or changing status as applicable taxpayers (a) Initial treatment as applicable taxpayer (1) In general In the case of the first taxable year for which a taxpayer is an applicable taxpayer— (A) the taxpayer may make the election under paragraph (3) with respect to nontradable covered assets, and (B) if the taxpayer elects the application of this subparagraph, the net first-year tax liability of the taxpayer for such taxable year shall be payable in 5 equal annual installments over the 5-taxable year period beginning with such taxable year. (2) Net first-year tax liability For purposes of this section— (A) In general The term net first-year tax liability means, with respect to the first taxable year described in paragraph (1), the excess (if any) of— (i) such taxpayer’s net income tax for such taxable year, over (ii) such taxpayer’s net income tax for such taxable year determined without regard to gain or loss of the taxpayer taken into account for such taxable year by reason of a taxable event described in section 491(b)(1). (B) Net income tax The term net income tax means the regular tax liability reduced by the credits allowed under subparts A, B, and D of part IV of subchapter A. (3) Election to pay and defer tax on nontradable assets (A) In general Except as provided in subparagraph (C), a taxpayer may elect to treat any nontradable covered asset held by the taxpayer as of the end of the first taxable year described in paragraph (1) as a tradable covered asset for purposes of applying section 491(b)(1) and this subsection. (B) Determination of gain (i) In general For purposes of applying section 491(a)(1)(A), the fair market value