Bill > S1687

This bill amends the Internal Revenue Code to modify the accounting rules for residential construction contracts, specifically changing how contractors report income and expenses. Currently, contractors must use the "percentage of completion method" (a tax accounting approach where revenue is recognized proportionally as a project progresses) for most long-term construction contracts. The bill expands an existing exception to this rule for home construction contracts, broadening it to include other types of residential construction contracts like condominiums. Specifically, the bill changes terminology from "home construction contract" to "residential construction contract" and adjusts the time frame for qualifying contracts from a 2-year to a 3-year period. The bill also updates related tax provisions, including how these contracts are treated for alternative minimum tax purposes. These changes will apply to contracts entered into after the date the bill is enacted, providing construction companies more flexibility in how they account for and report income from residential construction projects.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/1687/all-info