Common Contracts
1 similar null contracts
Internal Revenue Service, Treasury § 1.460–2August 28th, 2014
Example 12. Classification and completion. In 2001, C, whose taxable year ends December 31, agrees to manufacture and install an in- dustrial machine for B. C elects under para- graph (f) of this section to classify the agree- ment as a long-term manufacturing contract and to account for it using the PCM. The agreement requires C to deliver the machine in August 2003 and to install and test the ma- chine in B’s factory. In addition, the agree- ment requires B to accept the machine when the tests prove that the machine’s perform- ance will satisfy the environmental stand- ards set by the Environmental Protection Agency (EPA), even if B has not obtained the required operating permit. Because of tech- nical difficulties, C cannot deliver the ma- chine until December 2003, when B condi- tionally accepts delivery. C installs the ma- chine in December 2003 and then tests it through February 2004. B accepts the ma- chine in February 2004, but does not obtain the operating permit from the EPA
