Which of the following is an example of the timing strategy?
A) A corporation paying its shareholders a $20,000 dividend.
B) A parent employing her child in the family business.
C) A taxpayer gifting stock to his children.
D) A cash-basis business delaying billing its customers until after year end.
E) None of the choices are correct.

Question

Quizplus · Accepted Answer

Delaying billing until after year end is an example of the timing strategy as it affects the timing of the business's revenue and expense recognition. This can potentially impact the business's taxable income for the current year. A, B, and C are not examples of the timing strategy but are rather examples of other tax planning strategies such as dividend planning, family business employment, and gifting.

Which of the Following Is an Example of the Timing