[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 235 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 235

    To amend the Internal Revenue Code of 1986 to provide that the 
percentage of completion method of accounting shall not be required to 
be used with respect to contracts for the manufacture of property if no 
     payments are required to be made before the completion of the 
                     manufacture of such property.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 1995

  Mr. Ehlers introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to provide that the 
percentage of completion method of accounting shall not be required to 
be used with respect to contracts for the manufacture of property if no 
     payments are required to be made before the completion of the 
                     manufacture of such property.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXCEPTION FROM PERCENTAGE OF COMPLETION METHOD FOR CERTAIN 
              MANUFACTURING CONTRACTS.

    (a) In General.--Paragraph (2) of section 460(f) of the Internal 
Revenue Code of 1986 (relating to special rule for manufacturing 
contracts) is amended by striking ``unless'' and all that follows and 
inserting ``unless--
                    ``(A) such contract involves the manufacture of--
                            ``(i) any unique item of a type which is 
                        not normally included in the finished goods 
                        inventory of the taxpayer, or
                            ``(ii) any item which normally requires 
                        more than 12 calendar months to complete 
                        (without regard to the period of the contract), 
                        and
                    ``(B) any payment for the manufacture of such item 
                is required to be made before the manufacture of such 
                item is completed.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the amendments made by section 804 of the 
Tax Reform Act of 1986.
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