California non-conformity - Spidell

California non-conformity

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Message Board California non-conformity

This topic contains 1 reply, has 2 voices, and was last updated by Lynn Freer 2 months, 2 weeks ago.

  • Author
    Posts
  • #165080
    Regina Brown
    Participant

    Since there is no conformity for accounting method (cash/accrual), one of my clients’ average gross revenue jumped to $14MM for 2018 which means that cash basis is acceptance for Federal purpose (under $25MM) but not for California. It’s a sub S corporation. The correct answer is obvious: continue to use cash basis for Fed purpose but convert to accrual for Calif purpose. Is this right? And do I rely on FTB notice 2000-8? It just seems like a lot of work for something that’s essentially a timing issue.

  • #165110
    Lynn Freer
    Participant

    We are hoping for conformity but it won’t happen with the budget like we thought. I recommend waiting to file the return until the extended due date to see if we do conform. It may not happen until August