Completed contract vs percentage of completion

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  • July 26, 2014 at 3:39 pm #187243
    Anonymous
    Inactive

    Anyone know where you can find the differences between completed contract vs percentage of completion in regards to how it is related to tax? The only stuff I can find are from the FAR section.

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  • July 26, 2014 at 3:55 pm #582481
    Anonymous
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    If memory serves me – on Becker – it's in Reg. It's in the discussion of AMT issues, since the difference in the calculations deals with what is used for AMT. I want to say that it's mentioned twice. In the first four chapters in REG, Becker.

    July 26, 2014 at 7:45 pm #582482
    Anonymous
    Inactive

    What if you don't have Becker?

    July 26, 2014 at 11:48 pm #582483
    Anonymous
    Inactive

    Essentially what you really need to know is that % of completion is required for AMT, and CC is not allowed. So say a company had a $100,000 of recognized income over the course of the contract. AMT would add in a determined % of income each year, and in the final year it would be a subtraction from AMT since the full $100,000 would be recognized under CC, but for AMT purposes only the remaining % would be recognized. Sorry if it is a bit confusing.

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