Copper Corporation, a C corporation, had gross receipts of $5 million in 2011, $6 million in 2012, and $3 million in 2013. Gold Corporation, a personal service corporation (PSC), had gross receipts of $4 million in 2011, $7 million in 2012, and $5 million in 2013. Which of the corporations will be allowed to use the cash method of accounting in 2014?
A) Copper Corporation only.
B) Gold Corporation only.
C) Both Copper Corporation and Gold Corporation.
D) Neither Copper Corporation nor Gold Corporation.
E) None of the above.

Question

Quizplus · Accepted Answer

The Tax Cuts and Jobs Act of 2017 increased the gross receipts threshold for using the cash method of accounting from $5 million to $25 million. Therefore, both Copper Corporation and Gold Corporation, whose gross receipts for the three-year period are below $25 million, will be eligible to use the cash method of accounting in 2014.

Copper Corporation, a C Corporation, Had Gross Receipts of $5