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We regard use in the above settlement agreement of the term
“ownership” as simply protective and as not indicative of true
ownership of the Clubhouse. We do not find this language from
the 1999 settlement agreement arising out of a legal dispute as
controlling with respect to ownership of the Clubhouse during the
transition period.
Estimated Future-Period Interest Expense
In Rev. Proc. 92-29, sec. 4.01, 1992-1 C.B. 748, 750, in a
general explanation of the alternative cost method, reference is
made to the general capitalization rules and the interest
capitalization rules of section 263A(f) as follows:
The alternative cost method does not affect the
application of general capitalization rules to
developers of real estate. Thus, common improvement
costs incurred under section 461(h) of the Code are
allocated among the benefitted properties and may
provide the basis for additional computations (e.g.,
interest capitalization under section 263A(f)).
Petitioners contend generally that (regardless of the above
specific reference in Rev. Proc. 92-29 to the continued
application to developers of the general capitalization rules and
of the interest capitalization rule of section 263A(f)), the
history and purpose of Rev. Proc. 75-25 support their argument
that estimated interest expense should be included in the
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