All,
I am a small corporation that started in 2013. I build spec houses on the side and had no sales. I started and finished my first home in 2013 and had a pending sale in December but didn't close until January this year. This was the only project worked on. I don't have a lot of other deductions that I will be taking outside of pickup, trailer, skid loader and some tools. As I calculate all of my business expenses and the receipts towards the house, i am wondering if I should do the cash or accrual method of accounting. I would have a loss of $120k this year, but gains of $150k next, with not much to deduct, unless I start another house. I am thinking of the cash method to offset some Capitol gains from personal investments since I file together on schedule k. I haven't used an accountant yet and don't plan to until I finally make the leap and do this full time or do work outside of spec houses. I am looking for thoughts on whether or not to stay with the cash method or use the accrual method and pros and cons in how it applies to me