Rolando's Employer Pays Year-End Bonuses Each Year on December 31

question 57

Multiple Choice

Rolando's employer pays year-end bonuses each year on December 31. Rolando, a cash basis taxpayer, would prefer to not pay tax on his bonus this year. So, he leaves town on December 31, 2016 and doesn't pick up his check until January 2, 2017. When should Rolando report his bonus?

• A) 2016.
• B) it does not matter.
• C) Rolando can choose the year to report the income.
• D) 2017.
• E) None of the choices are correct.

---

Definitions:

F.O.B. Hartford

specifies terms of a shipping agreement where the seller is responsible for transportation costs and risks until the goods reach Hartford, at which point the buyer assumes responsibility.

Destination Contract

A contract specifying that the seller will bear the risk and cost of delivering goods to a specific location agreed upon by the seller and the buyer.

Identification of the Goods

The process of specifying or distinguishing goods to be covered by a sales or service contract.

Special Property Right

A legal right granted to an individual or entity over an intangible asset, such as intellectual property or a trade secret.