ABC Corporation declared a dividend for taxpayers of record as of December 24,2015.The dividend checks were mailed on December 31,2015.Ed,a cash basis shareholder,received the dividend check on January 2,2016.Ed cannot delay reporting the income from the dividend until 2016.

Question

Quizplus · Accepted Answer

As a cash basis taxpayer, Ed reports income when he actually receives it. Since he received the dividend check in 2016, he reports it as income for 2016, not 2015.

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