- 43 - patterned after the regulations under section 451, taking a “similarly liberal approach”. See S. Rept. 99-313, supra at 141, 1986-3 C.B. (Vol. 3) at 141; H. Rept. 99-426, supra at 626, 1986- 3 C.B. (Vol. 2) at 626. Respondent argues that consequently, the definitions of section 1.263A-1(f)(4), Income Tax Regs., “and the principles of its detailed guidance for the allocation of costs should govern * * * the interpretation of ‘reasonable method’ under the section 451 regulations.” We interpret the legislative history differently. The Senate report does not state that the regulations under sections 263A and 451 should be identical. Nor does the Senate report state that the same rules should apply to allocations under the two sections. The Senate report provides only that the uniform capitalization rules be “patterned” after the section 451 regulations, and it explicitly acknowledges that changes may be needed “in order to adapt such rules to production not involving a [long-term] contract”. The Senate report suggests that Congress knew differences existed between allocations under sections 263A and 451, and thus different rules would be required. Respondent further contends that, by not incorporating the reasonableness standard of the section 263A regulations into the section 451 regulations, the “choice” of which Code section to apply first “will lead to radically different results,” thusPage: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
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