In 2016,Juan,a cash basis taxpayer,was offered $3 million for signing a professional baseball contract.He counter offered that he would receive $900,000 per year for 4 years beginning in 2017.The team accepted the counteroffer.Juan constructively received $3 million in 2016.

Question

Quizplus · Accepted Answer

Juan did not physically receive the $3 million in 2016, he only negotiated a future payment schedule. Therefore, he did not constructively receive the $3 million in 2016.

In 2016,Juan,a Cash Basis Taxpayer,was Offered $3 Million for Signing