Description

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.

Instructor: Dave Peters, CPA, CFP, CLU, CPCU, MST, MBA

Target Audience

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

Course 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

Subjects

The impact of recent legislation on the construction industry (including the OBBBA)

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