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implicitly agreed that the income from crypt sales was taxable in
the year the mausoleum was completed, regardless of when the cash
had been collected.
Generally, when property is exchanged for cash, the receipt
of cash clearly reflects the receipt of income from the sale of
the property. However, when cash is received in exchange for a
promise to transfer property that is not yet constructed, the
amount or existence of income is less clear. As to the crypt
sales in issue, a pure cash receipts and disbursements method of
accounting would recognize income from the sale of a crypt when
cash is received but would delay deduction of the cost of
construction until the cash is spent, certainly not a clear
reflection of income. See Rotolo v. Commissioner, 88 T.C. 1500,
1514 (1987) ("'the cost of goods sold must be deducted from gross
receipts in order to arrive at gross income'" (quoting Sullenger
v. Commissioner, 11 T.C. 1076, 1077 (1948))); see also Veenstra &
DeHaan Coal Co. v. Commissioner, 11 T.C. 964 (1948). Until a
mausoleum was completed, Woodbine's overall method of accounting
would not clearly reflect income from crypt sales. Either the
costs of construction would have to be estimated and accrued, and
a portion expensed, or the recognition of gross receipts delayed
until receipts could be matched with the costs of construction.
Neither method would appear to reflect income more clearly than
the other. Without a showing either that Woodbine's overall
method of accounting would clearly reflect income from mausoleum
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