Self-Study: Surgent's Critical Issues Involving Taxation of Construction Contractors

Overview

Many consider taxation of construction contractors to be the most complex area of the Internal Revenue Code. This industry is subject to many elections and considerations to reduce or defer amounts owed. In this course, we will highlight these areas and discuss potential opportunities for practitioners and their clients. We will also discuss the impact of recent legislation on construction taxation, including changes to net operating losses and the AMT rules. This is a critical presentation tailored for CPAs who work for or represent construction contractors.

Highlights

The impact of recent legislation on the construction industry
How to qualify for the small contractor exemption and its advantages for the taxpayer
Options available to small contractors regarding taxation of long-term contracts
How the choice of entity impacts taxation of contractors
How AMT impacts the construction industry
IRC §460 and large contractors
How uninstalled materials impact taxation of contractors
Look-back rules
Using the 10 percent method to allow certain contractors to defer recognizing taxable income
Critical tax planning strategies for contractors

Prerequisites

Previous construction industry experience

Designed For

CPAs who work for or represent construction contractors looking for ways to reduce taxable income

Objectives

Recognize the impact of recent tax legislation on the construction industry
Identify when the cash method of accounting may be used for long-term contracts
Reference sections of the Internal Revenue Code (IRC) that impact the construction industry
Recognize how the IRC impacts specialized sectors of the construction industry, such as homebuilders and residential construction
Explain how a contractor qualifies for the small contractor exemption and its advantages
Recognize the different methods of income recognition from long-term contracts available when a contractor qualifies for the small contractor exemption
Identify the qualifications for the 10 percent deferral election
Identify the major differences regarding cost capitalization rules between U.S. GAAP, exempt contracts, and nonexempt contracts
Recognize the five basic rules concerning cost allocation for tax purposes
Recognize how alternative minimum tax impacts the construction industry and identify ways to reduce its impact
Understand the issues involved with the look-back provisions
Recall the issues involved in determining a worker’s status as an employee or independent contractor and how this determination impacts the construction industry
Recognize the key provisions of FIN 48 and how it impacts the construction industry
Identify the most commonly missed tax strategies for contractors