Constructive Receipt and Assignment of Income
Timing and Ownership of Income
Income is generally taxable when actually or constructively received. Taxpayers also cannot avoid taxation simply by assigning income to another person after earning the right to receive it.
- Actual receipt of income.
- Constructive receipt doctrine.
- Assignment of income doctrine.
- Cash versus accrual concepts.
Tip
If income is available without substantial restrictions, constructive receipt may require recognition even if the taxpayer delays collection.
Summary
Tax law focuses on economic control of income rather than simply when cash changes hands.