Article submitted by Larry Dietz, CCIM, Associate Broker for Saurage Rotenberg Commercial Real Estate

Written by Diane Tinney | July/August 2018

An Internal Revenue Service audit can be a terrifying, expensive proposition. For large land developers, an IRS campaign is examining the completed contract method of accounting for compliance risks.

This IRS campaign is designed to ensure that land developers are complying with Internal Revenue Code Section 460, which states that they generally are required to report taxable income under the percentage of completion method.

Dueling Accounting Methods

Land developers for long-term housing development contracts sometimes use the completed contract method of accounting instead of the percentage of completion method. Under PoC, taxable income is recognized based on a contract’s cost to date when compared to the total estimated cost of the contract.

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Larry Dietz, an associate broker with Saurage Rotenberg Commercial Real Estate, has over 30 years of Sales, Marketing and Public Relations experience.  He is a Designee member of the Certified Commercial Investment Member Institute (CCIM) and CCIM Louisiana Chapter; a member of the Commercial Investment Division of the Greater Baton Rouge Board of REALTORS® (CID); as well as an affiliate member of the National Association of REALTORS® (NAR).  He is a licensed real estate broker in Louisiana and Mississippi. 

Saurage Rotenberg Commercial Real Estate is a member of the Baton Rouge Area Chamber of Commerce (BRAC); the West Baton Rouge Chamber of Commerce; the Baton Rouge Better Business Bureau; the Louisiana Commercial Data Base (LACDB); and the International Council of Shopping Centers (ICSC). Several agents, on an individual basis, are members of the Society of Industrial and Office Realtors® (SIOR), the Certified Commercial Investment Member Institute (CCIM); the National Association of REALTORS® (NAR); and the Greater Baton Rouge Association of REALTORS® Commercial Investment Division (CID).