Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

Are a contractors payments to subcontractors included in the computation of COGS?

April 26, 2017COGs computation contractor included PAYMENTS Subcontractors

0

0 Posted

Are a contractors payments to subcontractors included in the computation of COGS?

3 Answers

0

0 Posted

A contractor’s payment to a subcontractor for the design, construction, remodeling, or repair of improvements on real property is excluded from gross revenue as a flow through fund and therefore cannot be included in COGS.

0

Posted

A contractor’s payment to a subcontractor for the design, construction, remodeling or repair of improvements on real property that is excluded from gross revenue as a flow through fund cannot be included in COGS.

0

Posted

A contractor’s payments to subcontractors for the construction, improvement, remodeling, repair, or industrial maintenance of real property may be included in the computation of COGS per TTC Section 171.1012(i) unless the payment has already been excluded from gross revenue as a flow-through fund mandated by contract in connection with the actual or proposed design, construction, remodeling or repair of improvements on real property per TTC Section 171.1011(g)(3). In other words, the same subcontractor payment may only be subtracted once, either as a flow-through fund or as COGS, in the calculation of margin.