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Question

Can we defer income from an arts grant that was for producing a performance that has been postponed due to covid

Forum|Forum|5 years ago
February 5, 2021
1 reply
0 views

all expenses will be paid in 2021

TurboTax Self Employed Online

It depends. Unless you use the accrual method of accounting, income that was received from a grant for producing a performance that was postponed due to COVID 19 cannot be postponed. This is because the income was constructively received in 2020. Constructive receipt means that you had the right to receive it and it was available to you, regardless of whether you cashed the check or not, so to speak. One example of constructively received income is prepaid income.

Here is a page on the IRS website that explains constructive receipt of income

and a TurboTax article about accrual accounting.