constructive receipt of income

constructive receipt of income
As applied to tax laws, is taxable income which is unqualifiedly subject to the demand of taxpayer on cash receipts and disbursements method of accounting, whether or not such income has actually been received in cash. Gounares Bros. & Co. v. U. S., D.C.Ala., 185 F.Supp. 794, 798.
Under this doctrine, income which is subject to unfettered command of taxpayer and which the taxpayer is free to enjoy at his option is taxed to him, despite the fact that the taxpayer has exercised his own choice to turn his back on that income and the doctrine is one by which form of transaction is ignored in order to get to its substance. Pittsburgh-Des Moines Steel Co. v. U. S., D.C.Pa., 360 F.Supp. 597, 599.
An example would be accrued interest on a savings account. Under the constructive receipt of income concept, such interest will be taxed to a depositor in the year it is available rather than the year actually withdrawn. The fact that the depositor uses the cash basis of accounting for tax purposes makes no difference

Black's law dictionary. . 1990.

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