What Treasury Regulations Would Pertain To This Issue?

HIco was an accrual method taxpayer. In 2022, HIco spent $260 million acquiring leases to explore for and develop geothermal energy on thousands of acres on the Big Island (Hawaii) and produce electricity. HIco did not, however, actually drill in that year. Nor did it pay someone to drill. Nor did HIco acquire drilling property. Nor did it sell any geothermal energy in those years. HIco reported $20 million in gross receipts from solar energy in 2022. HIco claimed $50 million in COGS (cost of goods sold). That $50 million reflected HIcos anticipated costs of drilling and extracting the geothermal energy it intended to selljust as soon as HIco could find and extract it.

I Really Do Appreciate The Time You Take To Help! I'll Make Sure To Leave A Like :3