Generally, subject to a few exceptions, taxpayers who perform long term construction contracts to construct real estate may choose between the completed contract-method of accounting or the percentage of completion method for tax accounting for long-term construction contracts.
B.
Generally, the tax code requires the use of the percentage of completion method of accounting and blocks the use of the completed contract method for construction contracts that cannot be completed within one year.
C.
The tax code allows the use of the completed-contract method of accounting for long-term construction contracts by taxpayers whose average annual gross receipts do not exceed $10 million. and where the contract is expected to be completed within two years from the commencement date.
D.
B & C are both false.
E.
A & C are both false.
Answer & Explanation
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