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jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3161
Experience:  I've prepared all types of taxes since 1987.
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I WAS INVOLVED IN A LAW SUIT WITH MY COMPany. i won. they have

Customer Question

I WAS INVOLVED IN A LAW SUIT WITH MY COMPany. i won. they have exhausted all there appeals. i just received a check for $50,00 dollars. my question is two parted, 1: can i delay cashing the check till january, thus putting off the taxes for this year. #2: if i cannot do that can i do the average income provision?
Submitted: 8 years ago.
Category: Tax
Expert:  jgordosea replied 8 years ago.

Greetings,

 

1: can i delay cashing the check till January, thus putting off the taxes for this year?

 

Sorry, but you can not delay counting the income if you are able to get it (cash it) this year.

Treas. Reg. § 1.451-2(a) defines the term "constructive receipt" as follows:

(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 control of its receipt is subject to substantial limitations or restrictions.

 

#2: if i cannot do that can i do the average income provision?

 

Income averaging is only available for those in farming and fishing occupations. See http://www.irs.gov/businesses/small/article/0,,id=185877,00.html for more details.

 

What you can do is try to defer any other income to a later year and bring as many deductions into this year. For example, you could pay your property tax before year end rather than after or you could make charitable contributions that you were going to make next year in this year.

 

I hope this helps even though it is likely not what you wanted to hear.

 

Best wishes.

 

jgordosea and other Tax Specialists are ready to help you
Customer: replied 8 years ago.
thank you it was what i needed to know.
Expert:  jgordosea replied 8 years ago.
You are quite welcome. Thank you for the opportunity to be of service.

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