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Gross Receipts Test Calculator (Section 448(c)), 2026 $32 Million

What do these figures come to once the work is shown?

Three-year average gross receipts against the 2026 threshold of $32,000,000, with short year annualization and the headroom left.

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Your figures
Example figuresIllustrative only. Type over them with your own.
Average annual gross receipts
$28,333,333
Three-year average against the $32,000,000 threshold
Headroom under $32,000,000
$3,666,667
Negative means over the threshold
2026 threshold
$32,000,000
Rev. Proc. 2025-32 section 4.30
Drawn to one scale
Average annual gross receipts$28,333,333
Headroom under $32,000,000$3,666,667
2026 threshold$32,000,000
All results
MeasureResult
Average annual gross receipts$28,333,333
ResultMeets the gross receipts test for 2026
Headroom under $32,000,000
Negative means over the threshold
$3,666,667
2026 threshold
Rev. Proc. 2025-32 section 4.30
$32,000,000
How this was worked out
Work shownrecomputed as you type
Annualized receipts of a short year = receipts x 12 / months
Average = sum of annualized receipts / number of years the entity existed (up to 3)
Test met for 2026 if average <= $32,000,000

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Annualized receipts of a short year = receipts x 12 / months
  • Average = sum of annualized receipts / number of years the entity existed (up to 3)
  • Test met for 2026 if average <= $32,000,000

How it works

A corporation or partnership meets the section 448(c) gross receipts test for a year if its average annual gross receipts for the three taxable years before that year do not exceed the threshold. For 2026 the threshold is $32,000,000. The same test frees a small business from the business interest limit in section 163(j).

An entity in existence for less than three years uses the period it existed, and receipts of a short year are scaled to a full year by multiplying by 12 and dividing by the number of months. Related entities treated as a single employer under section 52(a) or (b) are combined, so enter combined receipts. For the section 163(j) exemption, a taxpayer that is not a corporation or partnership applies the test as if it were one. Predecessor and gross receipts definitions are not tested.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

What does passing the test allow?

The cash method of accounting for a corporation or partnership, and an exemption from the section 163(j) interest limit, subject to other rules.

Are affiliates combined?

Yes, persons treated as a single employer under section 52(a) or (b) are treated as one person for the test.

What threshold applies to other years?

The threshold is indexed each year. This tool uses only the 2026 figure from the IRS.

Sources

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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