The constructive receipt doctrine:
A)is particularly restrictive for accrual-basis taxpayers.
B)causes income to be recognized before it is actually received.
C)causes income to be recognized after it is actually received.
D)applies equally to income and expenses.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

The constructive receipt doctrine requires income to be recognized when it is made available to a taxpayer, even if it has not yet been physically received. This rule is most relevant for cash-basis taxpayers, who recognize income upon receipt, because it requires them to include income in their taxable income even if they have not yet physically received the funds. Accrual-basis taxpayers recognize income when it is earned, regardless of when payment is actually received. Therefore, the doctrine is not particularly restrictive for accrual-basis taxpayers. The doctrine applies only to income, not to expenses.

The Constructive Receipt Doctrine