C Corporations

Question 1

(3) Exceptions for C Corp to use Cash Method of Accounting

Answer 1

1. Farming Business
2. Personal Service Corp (PSC)
3. Sm business with avg gross receipts of past 3 years of less than $30 million

Question 2

Entities prohibited from using cash method of accounting

Answer 2

C Corps
Partnerships w/ a C corp partner
Tax shelters

Question 3

Net Capital Losses

Answer 3

No deduction - use to offset Capital Gains
Carry Back (3) three years
Carry Forward (5) five years
Unused losses expire after the 5th year