Contractors Section 460 Part I

Program Number-A8FPT-T-00108-25-O

Contractors Section 460 Part I

1 Hour CE Federal Tax Webinar

Beth Evans, EA

September 24, 2026, Noon-1 p.m.

Program Description

Long-term contracts create unique tax accounting and reporting challenges for contractors and their tax professionals. This introductory webinar examines the fundamental requirements of Internal Revenue Code Section 460 and the tax accounting methods used to report income and expenses from qualifying long-term contracts.

Participants will learn how to identify a long-term contract, determine when the percentage-of-completion method is required, and recognize contracts that may qualify for an exception. The program will also cover contract cost allocation, estimating total contract costs, calculating the percentage of completion, and recognizing income during the life of a contract. Practical examples will demonstrate how Section 460 affects taxable income and tax return preparation. The webinar will also introduce the look-back method and common compliance issues encountered when working with contractor clients.

Learning Objectives

Upon completion of this webinar, participants will be able to:

• Define a long-term contract under Internal Revenue Code Section 460.
• Identify construction and manufacturing contracts that may be subject to Section 460.
• Determine when the percentage-of-completion method is generally required.
• Recognize contracts that may qualify for the home construction or small-contractor exceptions.
• Distinguish between the percentage-of-completion method and the completed-contract method.
• Explain how direct and indirect costs are allocated to long-term contracts.
• Calculate the percentage of contract completion using the cost-to-cost method.
• Explain how changes in estimated contract costs affect the recognition of taxable income.
• Recognize the basic purpose of the look-back method for completed long-term contracts.