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Rms a non-long-term contract activity, as defined in 1.460 1(d)(2), that is incident to or necessary for the manufacture, building, installation, or construction of the subject matter of one or more of the taxpayer s long-term contracts, the taxpayer must allocate the costs attributable to that activity to such contract(s). (g) Method of accounting. A taxpayer that adopts or elects a cost allocation method of accounting (or changes to another cost allocation method of accounting with the C.

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