Unformatted text preview: is not recognized in year 1 because the cash is actually received which is in January. Publication 334 talks about the cash method of income recognition and it states that include in your gross income all items of income you actually or constructively receive during your tax year. Even though Connie performed the services in December (year 1), it is the actual or constructive receipt of income that is the critical event for the cash method taxpayer Reg. §1.451-1(a). http://www.irs.gov/publications/p334/ch02.html#en_US_publink100025090 http://taxguide.completetax.com/text/Q11_2206.asp http://taxalmanac.org/index.php/Treasury_Regulations%2C_Subchapter_A %2C_Sec._1.446-1...
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- Spring '08
- Taxation in the United States, Generally Accepted Accounting Principles, Connie