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rata share of construction costs was expensed. Subsequent sales
of crypts were then treated similarly to grave plot sales; sales
were recorded when cash was received, and the remaining cost of
crypts was inventoried and then expensed as the remaining crypts
were sold.
Alice Berger asserts that Howard Berger, by using a method
of accounting for mausoleum crypt sales different from the method
he used for cemetery plot sales, changed Woodbine's accounting
method to a method that does not clearly reflect income and that
he did so without the Secretary's consent. She therefore
concludes that receipts from the sale of crypts were income when
received. Howard Berger asserts that the method of accounting
adopted for mausoleum crypt sales was not a change in accounting
method and that the cash method for grave plot sales and the
accrual method for mausoleum crypt sales is a permissible
combination of methods that clearly reflects income. Respondent
agrees with Howard Berger that there was no change in accounting
method, and that, until March 14, 1989, Woodbine used a
permissible combination of the cash and accrual methods that
clearly reflected income. However, respondent asserts that
Howard Berger's 1989 transfer of his interest in the Woodbine
business to Alice Berger caused "a triggering of tax to Howard
and that a pro-rata portion of the profit attributable to * * *
'deposits' [received prior to the transfer] should be taxed to
Howard in 1989."
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