78 - asset received 4 What is meant by the concept of...

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Your friend John files his own tax returns. He received a computer as a dividend from a closely-held corporation. He says that he does not need to report the computer as dividend income because the dividend was not paid in cash. Is he right? Answer: No. The fact that a dividend was paid in cash or property does not matter. Dividends are income to the recipient to the extent of the fair market value of the
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Unformatted text preview: asset received. 4. What is meant by the concept of “constructive receipt”? Answer: Constructive receipt of income means that the income is available to or in the control of the taxpayer regardless of whether the taxpayer chooses to utilize the income. For example, income credited to a savings account at year-end is constructively received even if the taxpayer does not withdraw it for use....
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This note was uploaded on 09/16/2011 for the course ACCT 145 taught by Professor Eric during the Spring '11 term at Palm Beach Community College.

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