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Screen 3115-6 - Method of Cost Allocation (1040)

Overview

Use this screen if the requested accounting change involved either property subject to section 263A or long-term contracts as described in section 460.

Allocation and Capitalization Methods

Enter information in this section to complete Form 3115, Schedule D, Part III, Section A.
Use the attached statement to describe the present and proposed method(s) used to capitalize direct and indirect costs (as well as mixed costs) properly allocable to real or tangible personal property produced and property acquired for resale, or to allocate and, when appropriate, capitalize indirect costs properly allocable to long-term contracts.
If the change being requested is for noninventory property that is subject to section 263A, use the attached statement to describe the types of property subject to section 263A and explain how the property was accounted for prior to January 1, 1987.

Direct and Indirect Costs Required to be Allocated

Enter information in this section to complete Form 3115, Schedule D, Part III, Section B.
Use the attached statement to enter an explanation for certain direct or indirect costs that are not fully included, to the extent required, for purposes of allocation under sections 263A or 460.
Enter
1
 (Yes) to indicate the cost is required to be allocated, or enter
2
 (No) to indicate the cost is not required to be allocated. If the cost is not applicable, leave the field blank and the application will enter
N/A
 in the appropriate column on Form 3115.
Use the statement attached to this field to enter other direct and indirect costs that are required to be allocated.
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