A/R of cash basis business taxable by FTB upon business termination? - Spidell

A/R of cash basis business taxable by FTB upon business termination?

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Message Board A/R of cash basis business taxable by FTB upon business termination?

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    • #190585
      Anonymous
      Member

      I remember a while back that a cash basis dentist client was taxed by FTB on the accounts receivable balance upon termination of business. Is this state tax law still in effect?

    • #190864
      Lynn Freer
      Participant

      Yes, when terminating a corporation, all accounts receivable must be included in the final return. But be sure to pay off accounts receivable before closing as they are not accrued into the final return for a cash basis taxpayer.

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