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You can use the cash basis gross recdeipts for the calculation. It sounds as though you feel that you may be close to the required changeover point. If so, you may want to consider doing it sooner so you can be in greater control. You may want to also consider spinning off a portion of the corporation into a new entity. This is something to consider if you have multiple lines of business and one is outpacing the others. For my higher revenue clients with an intense committment to fixed assets, I also usually recommend two or even three corporations - one for operating, one for real estate ownership, and one for equipment. The last two rent/lease to the operating entity. It provides a better security level in a litigous society. Not knowing your business it is not easy to give solid recommendations. I recommend you seek the advice of a CPA who is local to you on this point. Remember the corporations do not need to file consolidated returns.