Doctrine of Constructive Receipt

Tax Research Memorandum Edward Darling Problem #2 10/17/08 I. Facts: On January 2, 2003, Adrian current a keep back in the mail from wholeness Distri hardlyors for the amount of $10,000. Adrian is concerned rough the year in which the $10,000 is nonexempt because the check was dated declination 30, 2002. Adrian maintains that it would nominate been unreasonable for her to conduct 50 miles to pick up the check, and it was a holiday. Therefore, banks would non have been open, and she could not have received credit for the check until Monday. II. resign: Did the taxpayer have structural pass along in 2002? III. Authority: IRC § 1.451-2 (a) indicates that income is not constructively received if the taxpayers control of its receipt is takings to substantial limitations or restrictions. This subsection also goes on to state that if a raft ascribe its employees with bonus farm animals, but the stock is not acquirable to such e mployees until a future date, the classic crediting on the books of the corporation does not constitute receipt. In a case where a taxpayer was owed jailbreak pay from her employer following a merger, the employer mailed her severance check in a cognizant garner on December 30, 1974.

A daubal bearer attempted to submit the garner to her on December 31, 1974, but she was not central office and left a note look to pick the letter up at the post purpose after 3:00 pm. The taxpayer did not return home until 5:00 pm that day, and the post office was closed. She finally received the letter on January 2, 1975 and did not include her severance amoun! t on her 1974 return. The IRS challenged this, and the Tax homage sided with the taxpayer because she had substantial limitations to her control over the funds. TCM, [ CCH Dec. 34,914(M)] , Beatrice Davis v. Commissioner, Income: class of receipt: formative income: Control.--, (Jan. 12, 1978) IV. Conclusion: The taxpayer did not have constructive receipt in 2002 because she had substantial...If you want to get a in full essay, arrange it on our website: OrderCustomPaper.com

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