Now that the ink is dry on the American Recovery and Reinvestment Act of 2009, and its hundreds of pages of pricey provisions somewhat deciphered, it appears that the stimulus bill includes little to aid builders’ balance sheets, accountants say.

“It’s not as good as it could have been,” summarized Steve Friedman, national director of home building services for Ernst & Young.

Of biggest note, a provision that would have allowed all companies, not just builders, to carry back their losses for five years and collect refunds from taxes paid during profitable years was eliminated for all but small businesses.

And, while many smaller builders might qualify for the carry-back extension if they have receipts of less than $15 million a year, the extension only lasts for 2008. In addition, because of the way most are structured, as tax pass-through companies, S corporations, or LLCs, the effect is expected to be limited, said Friedman.

Larger production builders, who establish smaller separate companies to develop in different markets, also would not be able to qualify for the carry-back on each of their smaller companies because of an “affiliate test,” said Friedman.

While the carry-back for small businesses isn’t likely to help as many builders as when it was initially proposed, Lisa M. Jackson, vice president of John Burns Real Estate, said it could provide some assistance to their small trade partners. “The silver lining is that it’s likely to provide some benefit to the trades that serve the industry. Keeping some of them in business ultimately supports not just housing but the general economy,” she said.

But a less-known provision in the stimulus plan could help some builders restructure their balance sheets. The title of this financial tool is a mouthful—“the deferral and ratable inclusion of income arising from business indebtedness discharged by the reacquisition of a debt instrument”—but it’s worth understanding for builders in this troubled housing market and economy.

Here’s how it works: If a company manages to cut its debt, either by buying back its bonds at less than what it sold them for or by convincing its bankers to accept less to repay a loan, the difference between the amount of the original debt and the new debt is taxable at a corporate rate of 36%.

Under a new provision in the stimulus plan the taxes on that “forgiven” debt may be deferred until 2014 and then paid back in yearly installments of 20% ending in 2019 if the debt is bought back in the two years, from Jan. 1, 2009 until Dec. 31, 2010.

This would allow a company which has bond debt that is trading for less than the company paid for it to buy back the bonds at a lower price. This would essentially lower the company’s indebtedness and defer any tax consequences for four to five years.

Private builders theoretically could also take advantage of the tax code change to lower their debts by persuading their bankers to take less than the full value of a loan. If that loan happened to secure property, the builder could then sell the property for less than the loan and generate much-needed cash with deferred tax consequences.

Obviously, lowering debt helps the balance sheet of a company, especially if there are no tax consequences for at least four years. “But if your strategy is cash preservation, then you are going to have to do an analysis as to which is better,” said Friedman.

That’s because advantage of the debt forgiveness clause can have costs of its own. It takes cash to buy back the bonds and bank debt. For builders who have been hoarding cash to hold them over until the market turns, this provision may not be particularly useful.

“Right now everybody is looking for more liquidity,” said Albert Pisanelli, corporate tax director for Orleans Homes. “Yeah, you could buy your debt down … but at the end of the day, if you are not selling anything, you still need to pay our bills.”

Besides, Pisanelli said, most builders have such high losses that they would be able to offset any gains from loan forgiveness anyway.

Jackson of John Burns agreed that the provision is something of a mixed blessing for builders. “Reducing debt obligations, either through renegotiations or repurchasing at a discount could allow some to restructure their balance sheets,” she noted. “That being said, liquidity is so critical at a time like this, builder executives would have to really weigh the pros and cons of this. There is still no clarity about the length of the downturn, and those that do have cash have worked hard to get it. They may decide it’s more prudent to keep their acorns squirreled away.”