Discussion:Accounting Basis for Sudsidiary
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Discussion Forum Index --> Accounting Questions --> Accounting Basis for Sudsidiary
| 21 February 2007 | |
| Is a subsidiary required to adopt the cash/accrual tax basis of its parent? My client would be a cash basis filer by itself but a parent company which owns over 50% of it is an accrual filer. | |
| 23 February 2007 | |
| Subsequently, I spoke with the IRS helpline and they could not find a prohibition that would keep the subsidiary from filing on a cash basis. | |
Green hunter (talk|edits) said: | 25 February 2007 |
| Jim,
You seem to have answered your question - let me ask you a question - you said this is a subsidiary of the parent, do they file a consolidated TR with the parent? Does the subsidiary on the cash basis have inventory on its books? If you answered yes to any of these questions I would do suggest that you consider reviewing the "clear reflection of income" standard under IRC Sec. 446. | |
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