Nathan uses the percentage of completion method to report income from his real estate construction contracts. A

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Nathan uses the percentage of completion method to report income from his real estate construction contracts. A contract was begun in 2021 and completed in 2022. In 2021, Nathan reported gross income from the partial completion of the contract. In 2022, however, costs had increased above the original estimate. The contract was completed with the actual profit on the contract being less than the income from the contract reported in 2021. What mechanism should be used to correct for the overpayment of tax in 2021? Be specific.

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South-Western Federal Taxation 2022 Individual Income Taxes

ISBN: 9780357519073

45th Edition

Authors: James C. Young, Annette Nellen, William A. Raabe, Mark Persellin, William H. Hoffman

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