Mario is an employee of Flores Company.The company regularly pays its employees by direct deposit on or before the last day of each month.Mario's regular paycheck is deposited on Dec.31,2013,but Mario was away on vacation and didn't return until January 15,2014.The gross amount of the check is included in Mario's 2013 income.Which of the following concepts or doctrines best explains this treatment?

Question

Quizplus · Accepted Answer

The constructive receipt doctrine states that income is taxable when it is made available to the taxpayer, even if not physically received. In this case, Mario's paycheck was made available to him on Dec. 31, 2013, even though he did not physically receive it until January 15, 2014. Therefore, the gross amount of the check is included in Mario's 2013 income because he had constructive receipt of it in that year.

Mario Is an Employee of Flores Company