Avery a cash-method taxpayer is a physician. In December of 2022, Avery receives $25,000 in checks from his patients, but he does not deposit the money in his bank account until January 7, 2023. How much income will Avery recognize in 2022 and 2023 from these transactions? Would your answer change if one of the patients told Avery that the check for $4,000 wouldn't clear until January 3 because there were insufficient funds in his bank account until then? What is the reasoning behind the rules?

Answer rating: 100% (QA)

Under the cash method of accounting income is recognized when it is received regardless of when it i... View the full answer