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S. 1687Senate119th Congress (2025-2027)In Committee

Fair Accounting for Condominium Construction Act

Sponsored by Todd YoungSen. Todd Young (R-IN)
Introduced May 8, 2025

AI-Generated Summary

Updated November 24, 2025 at 12:43 AM UTC

The Fair Accounting for Condominium Construction Act changes the tax code so that certain residential construction contracts, such as condominium projects, can use a different accounting method instead of the standard percentage‑of‑completion approach. The amendment updates definitions and timing rules in the Internal Revenue Code, affecting how developers report income and calculate taxes on these contracts.

Key Provisions

  • Replaces the term “home construction contract” with “residential construction contract” in the relevant tax code section.
  • Allows a 3‑year period (instead of 2‑years) to determine eligibility for the accounting exception for contracts that aren’t classified as home construction contracts.
  • Renumbers and updates specific paragraphs to reflect the new language and rules.
  • Extends the exception to the Alternative Minimum Tax rules, changing the reference from home to residential construction contracts.
  • Applies only to contracts entered into after the law is enacted.

Legislative Activity

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1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance.

Finance Committee

May 8, 2025

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SenateIntro Referral

Introduced in Senate

May 8, 2025

SenateIntro Referral

Read twice and referred to the Committee on Finance.

Finance Committee

May 8, 2025

Bill Text

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Introduced in SenateIssued May 8, 2025

II

119th CONGRESS

1st Session

S. 1687

IN THE SENATE OF THE UNITED STATES

May 8, 2025

Mr. Young introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide an exception to percentage of completion method of accounting for certain residential construction contracts.

1.

Short title

This Act may be cited as the Fair Accounting for Condominium Construction Act.

2.

Exception to percentage of completion method of accounting for certain residential construction contracts

(a)

In general

Section 460(e) of the Internal Revenue Code of 1986 is amended—

(1)

in paragraph (1)—

(A)

by striking home construction contract both places it appears and inserting residential construction contract, and

(B)

by inserting (determined by substituting 3-year for 2-year in subparagraph (B)(i) for any residential construction contract which is not a home construction contract) after the requirements of clauses (i) and (ii) of subparagraph (B),

(2)

by striking paragraph (4) and redesignating paragraph (5) as paragraph (4), and

(3)

in subparagraph (A) of paragraph (4), as so redesignated, by striking paragraph (4) and inserting paragraph (3).

(b)

Application of exception for purposes of alternative minimum tax

Section 56(a)(3) of such Code is amended by striking any home construction contract (as defined in section 460(e)(6)) and inserting any residential construction contract (as defined in section 460(e)(4)).

(c)

Effective date

The amendments made by this section shall apply to contracts entered into after the date of the enactment of this Act.