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. Probably no other industry has so many elections and considerations that need to be considered and made in order 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 more recent legislation on construction taxation, including changes to net operating losses and the AMT rules. This is a critical presentation “tailor-made” for CPAs who either work for or represent construction contractors.

Objectives

Recognize the impact recent tax legislation has had on the construction industry

Identify when the cash method of accounting may be used for long-term contracts

Recall the authoritative source of the Internal Revenue Code (IRC) impacting the construction industry in general and long-term contracts in particular

Recognize how the IRC impacts specialized sectors of the construction industry, such as homebuilders and residential construction

State how a contractor qualifies for the small contractor exemption and the advantages it presents the contractor

Recognize the different methods of income recognition from long-term contracts available when the 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 the alternative minimum tax impacts the construction industry

Identify ways to reduce the impact of the alternative minimum tax

Recognize the issues involved with the "look-back" provisions

Recognize 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 specifically impacts the construction industry

Identify the most commonly missed tax strategies for contractors

Highlights

The impact of recent legislation on the construction industry

How to qualify for the "small contractor exemption" and its advantages to the taxpayer

Options available to the "small" contractor 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

How the "look-back" rules impact contractors

How the "10 percent method" can allow certain contractors to defer recognizing taxable income

Critical tax planning strategies for contractors

Designed For

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

Prerequisites

Previous construction industry experience

Preparation

None

Notice

By registering for this program and, accordingly, receiving the eMaterials, you’re acknowledging that you understand both the copyright restrictions on your eMaterials and the CTCPA cancellation policy.

Fees

Credits

Level

Code

Vendor

Fields of Study

Leader(s):

Jeffrey Lieman, Lieman Associates, LLC

Leader Bios

Jeffrey Lieman, Lieman Associates, LLC

Jeff Lieman currently heads his own consulting firm, Lieman Associates LLC, in Owings Mills, Maryland. He provides consulting services, contractual assistance services, and training to CPAs, their firms, and their clients. He is recognized nationally as a lecturer for various accounting, auditing, and technology topics and has been quoted in various trade journals. Since 2016, he has received the Surgent Outstanding Discussion Leader Award because of his consistently high evaluations for knowledge and presentation skills. Mr. Lieman’s previous experience included serving as the chief financial examiner for the Maryland Insurance Administration and being a director for Ellin & Tucker, Chartered. He trained staff in many areas of accounting, administration, and consulting. He also served as a senior manager and national trainer with KPMG in Baltimore, Maryland where he developed training materials for staff and instructors. He was elected Chairman of the Year by the Maryland Association of CPAs for chairmanship of the Computer Resources Committee.

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