Jason's employer pays year-end bonuses each year on December 31. Jason, a cash basis taxpayer, would prefer to not pay tax on his bonus this year (and actually would prefer his daughter to pay tax on the bonus). So, he leaves town on December 31, 2014 and has his daughter, Julie, pick up his check on January 2nd, 2015. Who reports the income and when?

Question

Quizplus · Accepted Answer

As a cash basis taxpayer, Jason must report the income in the year it is made available to him, which is 2014, regardless of when he physically receives the check.

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