Johnny's Meat Market, a cash basis taxpayer, receives a check for $150,000 from Mel'sDiner for an account receivable on December 31, 2023. Johnny's Meat Market has alreadydoubled their income from the previous year and they know their tax obligation will be highfor 2023. They also know they are going to have a lot of expenses in 2024 that will helpreduce their income. Which of the following is correct as it relates to the check from Mel'sDiner?Johnny's must report the $150,000 on their 2023 income tax returnJohnny's can choose to either report the income in 2023 or 2024 because it arrived so close to theend of the yearO Johnny's must wait until 2024 to report the incomeO Johnny's can send the check back to Mel's and request that they reissue it at the beginning of 2024so they do not have to report it in 2019

Johnny's must report the $150,000 on their 2023 income tax return. As a cash basis taxpayer,…

Answered: Johnny's Meat Market, a cash basis…

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 36P

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