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Under Rev. Proc. 2002-28, certain small businesses, including S corporations, can use cash method even they have inventories IF average annual gross receipts for the past 3 years are $10 million or less.
Does California conform this rule?
for example, X is a California S corporation and uses cash method accounting for federal purposes. X has average $8 million revenue from CA customers & $1.5 million from other states from 2012 to 2015. Can X use cash method for 2016?