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Old 04-03-2015, 09:11 PM
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Single form 3115 for 2 businesses?

Hi there,

I am a sole proprieter and have two businesses and file 2 schedule Cs with my 1040. Both businesses have been on the accrual method of accounting, but I would like to switch to cash-basis account/reporting starting with 2014. As I understand it, I have to file form 3115 with my 1040 to indicate this change under the automatic change request.

I am wondering if I need to file 2 separate 3115 forms, or will a single form cover both businesses b/c I want to make the same change?

Thanks!



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Old 04-04-2015, 12:28 AM
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it depends; Ordinarily, a taxpayer is required to file a separate Form 3115 for each change in method of accounting , but, in some cases,you are required or permitted to file a single Form 3115 for particular concurrent changes in method of accounting . Further, in some cases you are required or permitted to file a statement in lieu of a Form 3115 for particular changes in method of accounting. you must file a current Form 3115 to request a change in either an overall accounting method or the accounting treatment of any item; you need only one 3115 as you do two separate Sch Cs and then add the net income figures together before you go on to Sch SE. .However, whatever method you inform the IRS that you have chosen during the first year of your business you must continue to use; you wish to change accounting methods you are required to get permission from the IRS in advance. Failure to do so can result in penalties imposed by the IRS.please contact the irs for more info in detail



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Old 04-04-2015, 04:49 PM
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Hey Wnhough,

Thanks for your response. I thought I had to get permission before changing accounting methods, but it actually sounds like the IRS wants the majority of people to make the change and submit 3115 letting the IRS know they made the change as the default seems to be Automatic Change Request...unless I am reading it wrong.

Would you suggest I just fill out a single form for both businesses and do the automatic change request?

http://www.irs.gov/pub/irs-pdf/i3115.pdf

Thanks!



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