For a taxpayer who is required to use the percentage of completion method, the taxpayer can elect to defer the recognition of income and the related costs until the taxable year in which cumulative contract costs are at least 25 percent of the estimated contract costs.

Question

Quizplus · Accepted Answer

The percentage of completion method requires income and costs to be recognized as the work progresses, not deferred until a certain percentage of completion is reached.

For a Taxpayer Who Is Required to Use the Percentage