Can you explain the IRS rules around completed contract accounting methods?
As a property developer selling land I understand this is an area that is audited frequently. Can you explain best practices for handling these matters?
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It is possible for a contractor engaged in a long-term project to carry such "work in process" at cost until it is completed, accepted by the purchaser, and the full profit can be calculated. This is referred to as the completed-contract method. This is in conformity with the concept that revenue cannot be considered to be realized until there is a completed sale involving the formal recognition by the seller of new assets. Profit emerges from sales, not production.Leave a Comment 400 weeks ago