"In Shea v. Commissioner the U.S. Tax Court decided in favor of the taxpayer, a developer of planned residential communities, and allowed the taxpayer to defer the recognition of income from the sale of homes under its completed contract method of accounting for long-term home construction contracts until 95% of the costs of the development were incurred. That is, in applying the "95% completion" test, the subject matter of the contract was considered to be the entire development or phase of a larger development and not each individual house and lot. Thus, the allocable costs attributable to the subject matter of each contract included the costs of common improvements and amenities of the development, in addition to the costs of the house and lot. This decision addresses a long-standing controversy in this area and could help other builders and developers that currently are using the completed contract method to defer income related to home construction projects."
Foreclosure rates nationwide have been slowly but surely falling since their heights four or five years ago when the housing bust was wreaking havoc on the economy, but they are still relatively high in Long Island. Even as the real estate market appears booming in parts of Brooklyn and Manhattan, New York still has higher numbers of foreclosed homes than all but two other states.