David C. Hutchinson, et al. - Page 2

                                        - 2 -                                         
               SWIFT, Judge:  These cases were consolidated for trial,                
          briefing, and opinion.  For 1994, respondent determined the                 
          following deficiencies in petitioners’ Federal income tax:                  

                  Petitioners                               Deficiency                
             David C. Hutchinson                             $442,746                 
             Isaac M. Kalisvaart and Francien Kalisvaart-Valk358,095                  
             William T. and Sharon L. Criswell               188,862                  
             Robert S. and Judeen M. Bobosky                 128,054                  

               The issues for decision involve whether, under the                     
          alternative cost method of Rev. Proc. 92-29, 1992-1 C.B. 748                
          (Rev. Proc. 92-29), a real estate developer, in calculating gain            
          on the sale of residential lots sold in 1994, may allocate to the           
          developer’s bases in the lots sold estimated construction costs             
          relating to certain common improvements to the development and              
          whether the developer may include, in the calculation of                    
          estimated construction costs, estimated, future-period interest             
          expense relating to the common improvements.                                
               Unless otherwise indicated, all section references are to              
          the Internal Revenue Code in effect for 1994, and all Rule                  
          references are to the Tax Court Rules of Practice and Procedure.            

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