S.1687 - Fair Accounting for Condominium Construction Act (119th Congress)
Summary
S.1687, the Fair Accounting for Condominium Construction Act, seeks to amend the Internal Revenue Code of 1986. The amendment provides an exception to the percentage of completion method of accounting for certain residential construction contracts, specifically those related to condominiums. This bill was introduced in the Senate on May 8, 2025, by Mr. Young and referred to the Committee on Finance.
Expected Effects
The primary effect of this bill would be to change how certain residential construction projects, particularly condominiums, account for revenue and expenses for tax purposes. By providing an exception to the percentage of completion method, it could allow developers to defer tax liabilities. This could potentially free up capital for further investment in construction projects.
Potential Benefits
- Simplifies accounting for condominium construction projects.
- Potentially reduces the tax burden on developers in the short term.
- Could incentivize more residential construction projects, increasing housing supply.
- May improve cash flow for construction companies, allowing for reinvestment.
- Could lead to more competitive pricing for condominium units.
Most Benefited Areas:
Potential Disadvantages
- May delay tax revenue collection for the government.
- Could create loopholes for tax avoidance if not carefully regulated.
- The benefits may disproportionately favor large developers over smaller ones.
- Potential for increased complexity in the tax code despite the intention of simplification.
- Could lead to overbuilding if developers are overly incentivized by the tax benefits.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under the purview of Congress's power to lay and collect taxes, duties, imposts, and excises, as outlined in Article I, Section 8, Clause 1 of the Constitution. The bill does not appear to infringe upon any specific constitutional rights or limitations. The specific methods of taxation and exceptions are generally left to the discretion of Congress.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).