ABC Corporation declared a dividend for taxpayers of record as of December 24, 2018.The dividend checks were mailed on December 31, 2018.Ed, a cash basis shareholder, received the dividend check on January 2, 2019.Ed cannot delay reporting the income from the dividend until 2019.

Question

Quizplus · Accepted Answer

Ed, being a cash basis taxpayer, must report income when it is actually or constructively received. Since he received the dividend check in 2019, he should report the dividend income in 2019, not 2018.

ABC Corporation Declared a Dividend for Taxpayers of Record as of December