TX Society of CPAs Urges Immediate Action on Tax Extenders
IRS: Internet Domain Names must be Capitalized

Land Development Costs Not Qualified for the Completed Contract Treatment

In Howard Hughes Co. LLC v. Commissioner, No. 14-60915, the Fifth Circuit Court of Appeals confirmed a 2014 Tax Court decision that disallowed the use of the completed contract method of accounting. The company, in selling land it owned, agreed to prepare the lots for the construction of residential properties, but did not actually build the homes. The court concluded that the taxpayer would only qualify under IRC Section 460 if “the taxpayer builds, constructs, reconstructs, rehabilitates, or installs integral components to the dwelling units or real property improvements directly related to and located on the site of such dwelling units.”

http://www.ca5.uscourts.gov/opinions%5Cpub%5C14/14-60915-CV0.pdf

Comments

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name is required. Email address will not be displayed with the comment.)