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(A) the direct costs of such
property, and
(B) such property's proper
share of those indirect costs
(including taxes) part or all of
which are allocable to such
property.
Any cost which (but for this subsection) could not be
taken into account in computing taxable income for any
taxable year shall not be treated as a cost described
in this paragraph.
(b) Property to Which Section Applies.-–Except as
otherwise provided in this section, this section shall
apply to–-
(1) Property produced by the taxpayer.-
–Real or tangible personal property produced
by the taxpayer.
(2) Property acquired for resale.--
(A) In general.–-Real or
personal property described in
section 1221(1) which is acquired
by the taxpayer for resale.
(B) Exception for taxpayer
with gross receipts of $10,000,000
or less.-–Subparagraph (A) shall
not apply to any personal property
acquired during any taxable year by
the taxpayer for resale if the
average annual gross receipts of
the taxpayer * * * for the 3-
taxable year period ending with the
taxable year preceding such taxable
year do not exceed $10,000,000.
* * * * * * *
(g) Production.-–For purposes of this section–-
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Last modified: May 25, 2011