20. LO.5 Nathan uses the percentage of completion method to report income from his real estate construction

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20. LO.5 Nathan uses the percentage of completion method to report income from his real estate construction contracts. A contract was begun in 2013 and completed in 2014.

In 2013, Nathan reported gross income from the partial completion of the contract. In 2014, however, costs had increased above the original estimate. The contract was completed with the actual profit on the contract being less than the income from the contract reported in 2013. What mechanism should be used to correct for the overpayment of tax in 2013?

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South-Western Federal Taxation 2014 Corporations Partnerships Estates And Trusts

ISBN: 9781285424484

37th Edition

Authors: William H. Hoffman Jr., William A. Raabe, James E. Smith, David M. Maloney, James C. Young

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