This revenue procedure obsoletes Rev. Proc. 92-29, 1992-1 C.B. 748 and provides new rules and conditions for implementing the optional safe harbor method of accounting for real estate developers (developers) to determine when common improvement costs may be included in the basis of individual units of real property (units) in a real property development project (project) to determine the gain or loss from sale of those units (Alternative Cost Method). This revenue procedure treats the Alternative Cost Method as a method of accounting under §§ 446 and 481 of the Internal Revenue Code (Code) and is an alternative to the general requirements under § 461(h) of the Code. Under the Alternative Cost Method, a developer includes the share of the estimated cost of common improvements allocable to the units sold in the basis of such units regardless of whether the costs have been incurred under § 461(h), subject to the alternative cost limitations set forth in this revenue procedure. This revenue procedure also provides guidance on the application of the Alternative Cost Method to contracts accounted for under § 460 of the Code and the regulations thereunder.

26 CFR 601.204: Changes in accounting periods and in methods of accounting.

(Also: Part I, Sections 446, 460, 461, 481, 1011, 1012, 1016; 1.446-1, 1.460-1, 1.460-3, 1.460-4, 1.460-5, 1.461-1, and 1.461-4.)

Revocation of IRC 501(c)(3) Organizations for failure to meet the code section requirements. Contributions made to the organizations by individual donors are no longer deductible under IRC 170(c).