Legal Question in Construction Law in Minnesota

Re: When To Claim Construction Income

You really need an accountant for this one to get a complete answer. So don't rely on my comments in preparing your tax return; check with your accountant. But, in general terms the point at which you recognize the income depends on whether you're a cash basis or accrual basis company. Generally if you're a cash basis company, you don't recognize income until the check comes in. If you're an accrual basis company, income is generally recognized when it's invoiced. A complicating factor is the "completed contract" method of accounting, which is sometimes used on long-term contracts. There have been numerous changes to the tax rules on this accounting method in recent years and I haven't kept up with them all. So your best bet is to bring the paperwork in and check with a tax accountant.

Standard disclaimer: The above is given based on limited facts and information presented. Conclusions may differ significantly based on different facts. We do not have an attorney-client relationship.

That said, good luck to you and let me know if I can be of further assistance.