Tax
Dec. 29, 2025
If you don't receive payment in 2025 but could have, is it 2025 income?
Constructive receipt determines when income is considered taxable, focusing on whether you have an unrestricted right to payment, even if you don't actually receive it.
Robert W. Wood
Managing Partner
Wood LLP
333 Sacramento St
San Francisco , California 94111-3601
Phone: (415) 834-0113
Fax: (415) 789-4540
Email: wood@WoodLLP.com
Univ of Chicago Law School
Wood is a tax lawyer at Wood LLP, and often advises lawyers and litigants about tax issues.
This sounds like a silly question. How could something be
income in 2025 if you don't collect it until 2026? Welcome to the tax concept
of constructive receipt. According to the IRS, you have income when you have an
unqualified, vested right to receive it. Asking for payment later doesn't
change that. The idea is to prevent taxpayers from deliberately manipulating
their income.
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