News Blog

Construction & Real Estate Industry Advisor - Issue 1, 2013

Posted 8:22 PM by

In This Issue:

The Affordable Care Act and the 3.8% Medicare Tax
In December 2012, the Internal Revenue Service (IRS) issued proposed regulations that expand upon the Patient Protection and Affordable Care Act of 2010 (Affordable Care Act). One of the provisions of the Affordable Care Act is Code Section 1411, Unearned Income Medicare Contribution Tax. The new law and proposed regulations may affect the real estate and construction industries, as certain individuals may have an additional tax liability, depending on their income. By Douglas Rubenstein, CPA

Updated Proposed Accounting Rules for Leases
No accounting issue in recent memory has been in discussion longer and more highly anticipated than the Financial Accounting Standard Board’s (FASB) and International Accounting Standards Board’s (IASB) leasing convergence project. By Michael North, CPA

The Tiff Over TIFs
Tax Increment Finance districts, or TIFs, have been around for a long time. They work this way: A boundary line is drawn around an area of property. This area can be a single parcel, or it can extend for blocks and blocks. A snapshot is taken of the property taxes paid within the TIF at the time the district is established. Then, bonds are issued based on the new incremental property taxes resulting from the increase in assessed value that occurs within the TIF after its establishment date. By Tim Cook, JD

Maintaining Your Ability to be “Bond Worthy”
In today’s economy, risk-averse project owners are more likely to require bonds. At the same time, there are fewer sureties in business, and those who are still active have become more rigorous in their evaluation and approval of bond requests. So it is critical for contractors to show that they are “bond worthy.” Here are five tips for doing just that. By Thomas Nowak, CPA

Section 263A: Uniform Capitalization Rules
The Uniform Capitalization (UNICAP) rules of Section 263A of the Internal Revenue Code (IRC) prescribe the method for determining the types and amounts of costs that must be capitalized rather than expensed in the current period. The UNICAP rules apply to those who, in the course of their trade or business, produce real property for use in the business or activity; produce real property for sale to customers; or acquire property for resale. By Jolaine Hill, CPA

The Research Credit and the Construction Industry
The Credit for Increasing Research Activities – commonly known as the R&D credit – is intended to serve as an incentive to develop new and improved products and/or processes. Taxpayers typically envision the research credit applying only to product manufacturers, drug manufacturers, and the like. However, the credit is currently available to any taxpayer that participates in qualified research activities and has qualified research expenses paid or incurred on or before Dec. 31, 2013. By Alyson Lurker, CPA, JD


Katz, Sapper & Miller’s Construction & Real Estate Industry Advisor is a bi-annual newsletter that focuses on the financial side of the construction and real estate industries.