Sec. 13105. Increase in gross receipts test for construction contract exception to percentage of completion method
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Section 460(e)(1)(B) is amended— in the matter preceding clause (i), by inserting (other than a tax shelter prohibited from using the cash receipts and disbursements method of accounting under section 448(a)(3)) after taxpayer , and by striking clause
(ii)and inserting the following: who meets the gross receipts test of section 448(c) for the taxable year in which such contract is entered into (or, in the case of a sole proprietorship, who would meet such test if such proprietorship were a corporation). . Section 460(e) is amended by striking paragraphs
(2)and
(3)and by redesignating paragraphs
(4)through
(6)as paragraphs
(2)through (4), respectively. The last sentence of section 56(a)(3) is amended by striking section 460(e)(6) and inserting section 460(e)(4) . Section 460(e), as amended by subsection (a), is amended by adding at the end the following: If a taxpayer changes its method of accounting because subsections (a), (b), (c)(1), and (c)(2) do not apply by reason of the exception under paragraph (1)(B) or such subsections apply to the taxpayer because such exception no longer applies to the taxpayer— such change shall be treated as initiated by the taxpayer, such change shall be treated as made with the consent of the Secretary, and such change shall be permitted only on a cut-off basis for all similarly classified contracts entered into on or after the year of change and no adjustments under section 481(a) shall be made. . The amendment made by this section shall apply to contracts entered into after December 31, 2017, in taxable years ending after such date.