partnership must use the same year as that of the principal partners, those owning fivepercent or more interest in either profits or capitalCalendar Tax Year:If there is no majority interest tax year and the principal partners donot have the same taxable year, the partnership generally must sue the calendar year.There are two exceptions, (1) minimum deferral rules and (2) business purpose rules.Details regarding these exceptions are covered in the text.Accounting MethodsCash Method:The cash method is available to partnership that do not have a Ccorporation partner. The cash method however, MAY be used by partnerships with Ccorporation partners if the partnership’s average annual gross receipts are 5 million orless in the 3 preceding years. The determination is made annually.Accrual Method:Once the partnership’s three-year average exceeds 5 million, it mustuse the accrual basis thereafter.Separately Stated ItemsItems that must be separately stated include the following:oSlide 7c
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Accounting,Taxes,Generally Accepted Accounting Principles,partner,partnership net profit