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and economic performance occurs as F&D performs the services;
i.e., as F&D completes construction of the project. The parties
stipulated that, as of December 31, 1999, F&D had incurred over
$2,500,000 in costs relating to its efforts to complete the
project. Therefore, economic performance had occurred with
respect to $2,500,000 during 1999.
3. Conclusion
Because we have found that the requirements of the all-
events test were met in 1999 and that economic performance
occurred in 1999, the $2,500,000 liability had accrued and was
deductible for National’s and therefore petitioners’ 1999 tax
years. See sec. 461(h)(1).
Decisions will be entered
under Rule 155.
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Last modified: May 25, 2011