Linda delivers pizzas for a pizza shop.On Wednesday,December 31,2014,Linda made several deliveries and collected $400 from customers.However,Linda forgot to turn in the proceeds for the day to her employer until the following Friday,January 2,2015.The pizza shop owner recognizes the income of $400 when he receives it from Linda in 2015.

Question

Quizplus · Accepted Answer

Linda is her employer's agent.Therefore,the employer must include the $400 in gross income in 2014,the tax year in which the income was received by the employer's agent.

Linda Delivers Pizzas for a Pizza Shop