Sec. 199 deduction looking better for contractors

Posted by Trey Hardy, Tax Senior II on Aug 2, 2017

For many years, contractors have been advised to look into the Section 199 tax deduction for “domestic production activities.” Although the deduction focuses on manufacturing, it’s also available for “construction of real property performed in the United States” by companies “engaged in the active conduct of a construction trade or business.”

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Finding the right QI for your Section 1031 exchange

Posted by Cory Caddell, Tax Services Manager on Jun 26, 2017

So, you’ve decided to participate in an Internal Revenue Code (“IRC”) Sec. 1031 exchange. Qualified intermediaries (“QIs”) can make or break your exchange, so hiring the right one is crucial. Here’s what you need to know.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Pros and cons on joint ventures

Joint ventures offer several potential advantages. They enable smaller construction companies to take on large projects while dividing the contractual and financial risks of such projects. Further, those projects could be in geographic locations that you otherwise would not be able to access. A joint venture can also enable you to increase your bonding capacity, provide an opportunity to learn about more sophisticated technologies, and access other contractors’ relationships.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Succession planning: Look at things from a surety’s perspective

A well-designed succession plan is critical to the long-term survival of a construction business. In developing one, it’s important to consider the objectives and needs of your company’s owners as well as their family members. But it’s equally important to examine your plan from the perspective of your surety.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Lack of profit objective dooms deductions for real estate activities

Posted by Shea Kracheck, CPA, Tax Principal on Jun 26, 2017

Some people are drawn into the real estate game largely for the potential tax benefits—done right, for example, you can leverage any real estate losses you sustain into some generous deductions for business expenses. There’s a catch, though: You can’t be engaged in your real estate activities just to generate losses. If the IRS finds that you lack a profit motive, it will limit and perhaps disallow your deductions altogether. One taxpayer recently learned that the hard way.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

The WIP is good: A valuable management tool

Posted by Thalia Mancera, CPA on Jun 26, 2017

Financial statements are an indispensable tool for gauging your construction company’s historical results and financial health. But relying on them alone is like driving a car by looking in the rearview mirror. To see the road ahead, you need a work-in-progress (“WIP”) report for every job.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Help yourself and the environment with recycled materials

Posted by Chris Hollis, Tax Supervising Senior on Mar 22, 2017

Using recycled and reclaimed materials for construction projects can help curb greenhouse gas emissions and other pollutants. Doing so can also reduce the amount of waste sent to landfills.

Read More

Topics: Accounting Tips, Tax, Construction

Soggy numbers

6 common accounting mistakes to avoid

You’re probably familiar with the term “crunch the numbers.” Well, in a tumultuous industry like construction, it’s all too easy to let crisp, timely financials go soggy with outdated data and flat-out mistakes. Here are six common accounting errors to avoid.

Read More

Topics: Accounting Tips, Tax, Audit, Construction

Coming into its own: LLC investments

Posted by Cory Caddell, Tax Services Manager on Sep 7, 2016

During the last decade, limited liability companies ("LLCs") have become one of the most preferred forms of business entities through which to hold title to investment real estate properties. Prior to LLCs, real estate investors seeking limited liability protection were largely limited to using corporations to acquire title — a form of entity that has potential drawbacks.

Read More

Topics: Real Estate, Accounting Tips, Tax, Construction

Are you getting all that you deserve?

Don’t overlook the research credit

Construction businesses are often surprised to learn that they may be eligible for the research tax credit, often referred to as the “research and development,” “R&D” or “research and experimentation” credit. Too often, they assume that this tax break is for only large pharmaceutical, biotechnology, software, and aerospace companies, so they don’t bother to investigate whether any of their activities qualify.

Read More

Topics: Accounting Tips, Tax, Audit, Construction