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S corp with gross receipts less than $10 million - cash method

November 22, 2016 • Weil and Company LLP • Log In to Post Comments

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?


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CA conforms to the federal method of accounting.

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