Expenses that relate to a particular lot can only be deducted from the net income from that lot and not against the net income of any other lots of the taxpayer; unabsorbed expenses must be added to the cost of the lot.
Services added to land meet the legal definition of land.
Where on a sale of land inventory part of the proceeds are received (and included under s. 12(1)(a)) as a prepayment for the identifiable cost of future services to be provided by the taxpayer, the reserve generally will be available.
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