Chuck Grassley: “I agree with Senator Baucus. Excluding participations and residuals from a property's initial depreciable cost basis…”

“I agree with Senator Baucus. Excluding participations and residuals from a property's initial depreciable cost basis under the income forecast method results in a mismatching of income from the property and the expenses incurred in producing the property. The Ninth Circuit reached this conclusion in Transamerica. Moreover, I would note that including participations and residuals in the initial depreciable cost basis is consistent with industry standards in computing income for financial accounting purposes. We should remove this uncertainty to avoid needless disputes and to ensure the accurate reflection of taxpayers' income.”