Jack from Ohio Posted February 9, 2018 Report Share Posted February 9, 2018 I have a farmer that wishes to change from accrual to cash. I know how to fill out 3115 to accomplish the change. Here is my question: There is inventory involved. How do I treat it when making the accounting method change? Do I carry it over as inventory until sold, then use the basis as COGS? Do I expense the inventory and have no COGS when sold? I am certain, someone on the board has experience. Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 9, 2018 Report Share Posted February 9, 2018 Good luck. I thought if there was any inventory involved, accrual must be used *at least for the inventory portion* in a hybrid system. But farms have lots of rules that apply to farms only. So, laddie, the best I can tell ye is I havenae a clue! (Said with a strong Scots accent.) Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 22, 2018 Report Share Posted February 22, 2018 Depends. If there is stored wheat or calves raised by the farmer they would be a section 481(a) adjustment. If there are calves purchased for resale he would continue to treat as inventory under the cash method. 1 Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 22, 2018 Author Report Share Posted February 22, 2018 Thank you for the help. I understand the hybrid method. Next question: When I mark the farm as cash method, the ability to input inventory goes away. How/where do you input the inventory under the cash method? Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted February 28, 2018 Report Share Posted February 28, 2018 You just input the cost of sale on line 1b of Schedule F, there is nowhere to input the beginning and ending inventory. Quote Link to comment Share on other sites More sharing options...
WITAXLADY Posted March 1, 2018 Report Share Posted March 1, 2018 I carry them in fixed assets under non depreciable until sold or placed into service so not forgotten Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted March 1, 2018 Report Share Posted March 1, 2018 39 minutes ago, WITAXLADY said: I carry them in fixed assets under non depreciable until sold or placed into service so not forgotten So do I, I use an asset program outside of ATX. Quote Link to comment Share on other sites More sharing options...
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