In a message dated 12/12/2003 11:32:38 PM Pacific Standard Time,
vpFREE@yahoogroups.com writes:
···
Date: Fri, 12 Dec 2003 21:11:12 -0500
From: "Judy Slatin" <j.slatin@verizon.net>
Subject: RE: Re: Taxing Question
Bill,
If you had "constructively" received the cash back in Dec, in other words it
was available to you in Dec, then you should include the cash back in that
year even if you withdrew it in Jan. If, on the other hand, you earned cash
back in Dec and you received bounce-back cash in Jan, even though you earned
it in Dec, you would include it in the year received. This is because it
was not yet available to you in Dec. (because you did not have knowledge of
the amount.) This pertains to most individuals who are "cash basis
taxpayers." If you were on the accrual basis (unusual for individuals) then
you would record in the year earned. Hope this helps.
Judy
Thank you for an excellent answer, Judy.
You have covered all bases with the phrase "constructively" received the cash.
However, some people might still be confused as to what "constructively"
received means. The following is a common example:
If the bounceback is of the type that must be played through the machines,
then I would venture to say that it must be recognized in the year in which the
cash (as a result of playing it through) is received. This is because
bounceback in this form is not actual cash. Many players accumulate their bouncebacks
(if expiration dates allow) & wait to play it when it's significant.
BTW, I am not a CPA, am not an enrolled agent, am not a tax lawyer, have not
worked for H & R Block but I do have opinions & try to express them as
objectively as I can. Oh, one year I did read the tax code from cover to cover but
since it was in 1986 that experience has to be deeply discounted.
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