In 2012, Juan, a cash basis taxpayer, was offered $3 million for signing a professional baseball contract.He counteroffered that he would receive $900,000 per year for 4 years beginning in 2013. The team accepted the counteroffer. Juan constructively received $3 million in 2012.

Question

Quizplus · Accepted Answer

Juan did not actually receive the $3 million in 2012, but rather negotiated a contract for future annual payments. Therefore, he did not constructively receive $3 million in 2012.

In 2012, Juan, a Cash Basis Taxpayer, Was Offered $3