Fair Accounting for Condominium Construction Act

The Fair Accounting for Condominium Construction Act amends the Internal Revenue Code to alter how certain residential construction contracts are treated for tax purposes under the long-standing percentage-of-completion (POC) method. Specifically, it broadens the class of contracts labeled as “residential construction contracts” (replacing references to “home construction contracts”) and changes the time threshold used to determine eligibility for the POC framework for these contracts that are not considered “home construction.” The bill also aligns the alternative minimum tax (AMT) treatment with the new definition and timing rules, and it applies these changes to contracts entered into after the act’s enactment. In short, the bill tailors POC rules for condo- and other multi-unit residential projects, potentially affecting when income and taxes are recognized for such projects.