An advance payment received in June 2014 by an accrual basis and calendar year taxpayer for services to be provided over a 36-month period can be spread over four tax years.

Question

Quizplus · Accepted Answer

The income from advance payments for services received by an accrual basis taxpayer cannot be deferred beyond the tax year following the year of receipt.The scenario described in the question relates to advance payments for goods received by an accrual basis taxpayer.

An Advance Payment Received in June 2014 by an Accrual