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Change in Accounting Period

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Change in Accounting Period
A change from one accounting period to another. Income for the short period created by the change must be annualized to calculate the tax for that period.


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As a general rule, a taxpayer must establish a sufficient business purpose for a change in accounting period, typically under a facts-and-circumstances test.
Such personal service corporations are also denied the automatic change in accounting period afforded most C Corporations.
Is not an S corporation and does not elect this status for the year immediately following the change in accounting period.
 
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