Post a new topic
    2 Replies Latest reply on Jan 18, 2010 8:40 AM by bm911tax

    When must I claim this income?

    LindaG Newbie
      I read with interest a post from last year, from a Sole Proprietor LLC who received a check dated 12-28 and asked when he had to claim the revenue. I have a similar situation: A client mailed a check on 12-31-09, dated 12-31-09, which I received 1-05-2010 and deposited 1-11-0201. My accounting is on a cash basis but, as a Sole Proprietor LLC, I receive 1099s from most of my clients. In the past, I've always claimed year-end revenue in the year in which the check is dated, so my 1099s reconcile to my 1040 revenue--but I'd really like to take this particular check as 2010 revenue, if there's a legal way to do that. Thoughts?
        • Re: When must I claim this income?
          LUCKIEST Guide
          When must I claim this income??

          Linda, If you are on the "cash basis" then the income is 2010, when you deposited it.

          Talk to your accountant. Also go to Members page and share some info

          Good luck
          <!--Session data-->
          • Re: When must I claim this income?
            bm911tax Adventurer
            What you are referring to is MCB-Modified Cash Basis. Usually if you are a cash basis taxpayer you record revenue when you receive the payment, eventhough you had not deposited it yet. But in some instances like yours when you have a 1099 refelecting payment sent to you on 12/31/09 but you received it on 1/5/10 you can treat that payment for revenue purposes for 2010 and not in your 2009 taxes, providing you will attach an detailed explanation to your return and explaining about MCB method used. BUT, I would not recommend doing so. Your accountant will charge you $$ to adapt this MCB and most likely your accounant will have to answer additional IRS question. Unless its a HUGE check and it really saves you lots of $$$ on taxes, don't bother.

            Gud luck.