For farm operations, which historically have been permitted to use the cash method of accounting even though inventories are a material income determining factor, a major concern with limited liability companies (LLCs) is whether the cash method of accounting is available to such entities. At the moment, a substantial question exists about eligibility for cash accounting, particularly if LLC members are viewed as limited partners in the event the LLC is classified as a partnership for federal income tax purposes.
Harl, Neil E.
"Limited Liability Companies: Eligibility for Cash Accounting (Third of three parts),"
Agricultural Law Digest: Vol. 4
, Article 1.
Available at: http://lib.dr.iastate.edu/aglawdigest/vol4/iss14/1