Rolando's employer pays year-end bonuses each year on December 31.Rolando, a cash-basis taxpayer, would prefer not to pay tax on his bonus this year.So, he leaves town on December 31, 2018, and doesn't pick up his check until January 2, 2019.When should Rolando report his bonus?

Question

Quizplus · Accepted Answer

As a cash-basis taxpayer, Rolando must report income in the year it is received, available, or constructively received. Since the bonus was available in 2018, he should report it for that year, regardless of when he physically picked up the check.

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