Jason's employer pays year-end bonuses each year on December 31.Jason, a cash-basis taxpayer, would prefer not to pay tax on his bonus this year (and actually would prefer his daughter to pay tax on the bonus).So, he leaves town on December 31, 2018, and has his daughter, Julie, pick up his check on January 2, 2019.Who reports the income and when?

Question

Quizplus · Accepted Answer

Jason, as a cash-basis taxpayer, must report the income in 2018 because the bonus was made available to him on December 31, 2018, regardless of when he actually picked it up.

Jason's Employer Pays Year-End Bonuses Each Year on December 31