Accounting Methods. Certain small business taxpayers may be eligible to adopt or change to the cash method of accounting and may not be required to account for inventories. For more information, see Accounting Methods.
Reportable transactions. You must file Form 8886, Reportable Transaction Disclosure Statement, to report certain transactions. You may have to pay a penalty if you are required to file Form 8886 but do not do so. You may also have to pay interest and penalties on any reportable transaction understatements. Reportable transactions include
transactions the same as or substantially similar to tax avoidance transactions identified by the IRS,
transactions offered to you under conditions of confidentiality for which you paid an advisor a minimum fee,
transactions for which you have, or a related party has, contractual protection against disallowance of the tax benefits,
transactions that result in losses of at least $2 million in any single tax year ($50,000 if from certain foreign currency transactions) or $4 million in any combination of tax years,
transactions resulting in book-tax differences of more than $10 million on a gross basis, and
transactions with asset holding periods of 45 days or less and that result in a tax credit of more than $250,000. For more information, see the Instructions for Form 8886.
Information courtesy of the Internal Revenue Service.
