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§447, Accounting Methods for Farming Corporations

Accounting Methods for Farming Corporations

Farming corporations and farming partnerships in which a corporation is a partner are generally required to use an accrual method of accounting (IRC § 447(a)). However, a farming C corporation or a farming partnership in which a C corporation is a partner can use the cash method if it meets a $25 million gross receipts test (adjusted annually for inflation) of IRC § 448(c) (see Explanation: §448, Small Businesses) (IRC § 447(c)).

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