The current earnings and profits are 25000 the

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Unformatted text preview: tax purposes by most individuals, qualified personal service corporations (which are treated as individuals for purposes of these rules), and taxpayers whose average annual gross receipts do not exceed $1,000,000, the accrual basis method of accounting for tax purposes is required for the following: ● ● ● ● The accounting purchase and sales of inventory (and inventories must be maintained) Tax shelters Certain farming corporations (other farming or tree-raising businesses may generally use to the cash basis) C Corporations, trusts with unrelated trade or business income, and partnerships having a C corporations as a partner PROVIDED the business has GREATER than $5 million of average annual gross receipts for the three-year period ending with the prior tax year Choice "a" is incorrect. A C corporation with average annual sales for the past three years of less than $1,000,000 would not be required to file income taxes using the accrual basis method of accounting, as generally, taxpayers whose annual average annual gross rec...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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