Taxation of real estate and homebuilding activities has been subject to IRS scrutiny, primarily regarding compliance with cost capitalization issues and revenue recognition, including the costing out of units sold. This course provides an in-depth analysis of tax accounting methods for various real estate and homebuilding activities, including the application of IRC Section 263A (capitalization and inclusion in inventory costs of certain expenses) and IRC Section 461 (the general rule for the taxable year of deduction). This program will provide clear insights into approaching compliance with costing rules, avoiding IRS audit adjustments, and obtaining the most beneficial tax results for the home builder/developer.
Learning Objectives
• Recognize the applicable revenue recognition and costing methods required for homebuilding activities
• Determine appropriate accounting methods now available as a result of tax reform
• Identify areas where tax deferral still exists, especially for small businesses
Major Topics
• Discussion of appropriate entity selection and small taxpayer status
• Walkthrough of costing methods and compliance issues under IRC 263A
• Analysis of IRC 461 related to economic performance
• Illustrative examples and analysis
• Sample computations for homebuilder unit costing
• Recent IRC 263A challenges by the IRS
• Update of related cases and issues’including recent tax reform
