Discussion:Cash Basis Equipment Sales Company

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Discussion Forum Index --> Basic Tax Questions --> Cash Basis Equipment Sales Company


Discussion Forum Index --> Tax Questions --> Cash Basis Equipment Sales Company

Goodday (talk|edits) said:

26 May 2014
C Corp tax reporting on cash basis for 10 + yrs. Sole activity: sales of industrial equipment & parts (new and used) used in mining activities. Sales exceed $1 million annually. I would have thought it should have always been on accrual basis. Is there a provision otherwise?

If incorrectly using cash basis, would Form 3115 be appropriate to elect to change method and spread cost over 4 yrs? Thanks!!!

Coddington (talk|edits) said:

27 May 2014
If its average annual gross receipts have always been over $1 million over the prior three years of its existence and it has tax ownership of the equipment and parts it sells, then yes, it should have always been on the accrual method. An automatic consent Form 3115 can fix the problem, probably.

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