Define the term constructive receipt. Explain its importance. Explain three restrictions on the concept of constructive receipt. Define the term constructive receipt. Explain its importance. OA. Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. B. Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. OC. Under the concept constructive receipt, income is taxed once eamed and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment. OD. Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes. Explain three restrictions on the concept of constructive receipt. ncome is not constructively received if: a check received after banking hours. an employee's salary is available, but the employee does not accept payment. interest is credited to a bank savings account. the amount is unavailable to the taxpayer. the payor does not have the funds necessary to make payment. the receipt is subject to substantial limitations or restrictions.
Define the term constructive receipt. Explain its importance. Explain three restrictions on the concept of constructive receipt. Define the term constructive receipt. Explain its importance. OA. Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. B. Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment. OC. Under the concept constructive receipt, income is taxed once eamed and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment. OD. Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes. Explain three restrictions on the concept of constructive receipt. ncome is not constructively received if: a check received after banking hours. an employee's salary is available, but the employee does not accept payment. interest is credited to a bank savings account. the amount is unavailable to the taxpayer. the payor does not have the funds necessary to make payment. the receipt is subject to substantial limitations or restrictions.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:**a. Define the term constructive receipt. Explain its importance.**
- **A.** Under the concept of constructive receipt, income is taxed once earned but not received by the cash-basis taxpayer. The taxpayer cannot defer the tax by refusing to accept payment.
- **B.** (Selected) Under the concept of constructive receipt, income is taxed when it becomes available to the taxpayer. The taxpayer cannot defer the tax by refusing to accept payment.
- **C.** Under the concept of constructive receipt, income is taxed once earned and received by the cash-basis taxpayer. The taxpayer can defer the tax by refusing to accept payment.
- **D.** Under the concept of constructive receipt, income is taxed when it is received by the taxpayer. The taxpayer can transfer the income to another person to avoid paying taxes.
**b. Explain three restrictions on the concept of constructive receipt.**
*Income is not constructively received if:*
1. a check is received after banking hours.
2. an employee’s salary is available, but the employee does not accept payment.
3. interest is credited to a bank savings account.
4. the amount is unavailable to the taxpayer.
5. the payor does not have the funds necessary to make payment.
6. the receipt is subject to substantial limitations or restrictions.
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