received money?

Forum|Forum|1 year ago
December 21, 2024
3 replies
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When is money is considered received for tax purposes. When you received the check, when you deposit the check, or when the money posts to your account.

Not A Product Question

Best answer by M-MTax

§1.451-2:

(a) General rule. Income although not actually reduced to a taxpayer's possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he could have drawn upon it during the taxable year if notice of intention to withdraw had been given. However, income is not constructively received if the taxpayer's controls of its receipts is subject to substantial limitations or restrictions.

DoninGA

Employee

If you are referring to a paper check, it is income when you receive the check.

Opus 17

Employee

@DoninGA wrote:

If you are referring to a paper check, it is income when you receive the check.

(that is, assuming there is money in the account and the check is spendable and can clear.)

The doctrine of constructive receipt means you receive the money when you receive it in usable form, even if you don't use it right away. If a check comes in the mail on Monday, and you don't deposit or cash it until Wednesday, it is still income on Monday. However, if the check was post-dated to Thursday because the payer had insufficient funds before then, it would be received on Thursday.

VolvoGirl

Employee

For some things it might be when the company issued the check. Especially at the end of the year. Like if you took a IRA or 401K withdrawal. The 1099R might be for 2024 but you didn’t get the check until early January 2025. Or for investment sales.