Common use of Closing costs reserves Clause in Contracts

Closing costs reserves. In the case of any reserve for qualified closing costs, there shall be included in gross income for any taxable year an amount equal to the excess of— (i) the closing balance of the reserve for such taxable year, over (ii) the current closing cost of the tax- payer with respect to the reserve property, determined as if all production with re- spect to the reserve property for any tax- able year to which the election under para- graph (1) applies had occurred in such tax- able year.

Closing costs reserves. In the case of any reserve for qualified closing costs, there shall be included in gross income for any taxable year an amount equal to the excess of— (i) the closing balance of the reserve for such taxable year, over (ii) the current closing cost of the tax- payer with respect to the reserve property, determined as if all production with re- spect to the reserve property for any tax- able year to which the election under para- graph (1) applies had occurred in such tax- able year.