Copper Corporation,a C corporation,had gross receipts of $5 million in 2012,$6 million in 2013,and $3 million in 2014.Gold Corporation,a personal service corporation (PSC),had gross receipts of $4 million in 2012,$7 million in 2013,and $5 million in 2014.Which of the corporations will be allowed to use the cash method of accounting in 2015?
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

Under the Tax Cuts and Jobs Act (TCJA), C corporations and personal service corporations (PSCs) with average annual gross receipts of $25 million or less for the three preceding tax years are eligible to use the cash method of accounting. Both Copper Corporation and Gold Corporation had average annual gross receipts of less than $25 million for the three preceding tax years, so they are both eligible to use the cash method of accounting in 2015.

Copper Corporation,a C Corporation,had Gross Receipts of $5 Million in 2012,$6