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On August 24, 2019, Excelsior Corp., an accrual basis taxpayer, entered into a contract with Greene to manufacture an item that it did not keep

On August 24, 2019, Excelsior Corp., an accrual basis taxpayer, entered into a contract with Greene to manufacture an item that it did not keep in inventory. At the time it entered into the contract, it was anticipated that the manufacturing process would take a minimum of three years to complete. Estimated costs associated with the project were equal to $8,000,000, and proceeds to be received by Excelsior Corp. over the life of the agreement were equal to $11,500,000. During the taxable year 2019, Excelsior Corp. incurred $1,200,000 of costs in connection with the project. In 2020, Excelsior Corp incurred $2,320,000 of costs in connection with the project. In addition, in 2019, Excelsior

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