Common Contracts
1 similar null contracts
ContractDecember 18th, 2014
which ‘‘substantial advance payments’’ are received, are includible in gross income for 1974. Therefore, for taxable year 1974 X must include $80 in his gross income. X must in- clude in his cost of goods sold for 1974 the cost of such goods (or similar goods) on hand or, if no such goods are on hand, the esti- mated inventoriable costs necessary to sat- isfy the contract. Since no further deferral is allowable for such contract, X must include in his gross income for the remaining years of the contract, the advance payment re- ceived each year. Any variance between esti- mated costs and the costs actually incurred in fulfilling the contract is to be taken into account in 1977, when the goods are deliv- ered. See paragraph (c)(2) of this section.
