Problem $4-42($LO$.2,6)$

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Freda is a cash basis taxpayer. In $2024,$ she negotiated her salary for $2025.$ Her employer offered to pay her $$21,000$ per month in $2025$ for a total of $$252,000.$ Freda countered that she would accept $$10,000$ each month for the $12$ months in $2025$ and the remaining $$132,000$ in January $2026.$ The employer accepted Freda's terms for $2025$ and $2026.$

a$.$Did Freda actually or constructively receive $$252,000$ in $2025?$

YesNo

$.$ The amount the employer might have been willing to pay

isis not

constructively received in $2025$ because under the actual contract terms, she

diddid not

have the right to receive the income in $2025.$

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b$.$What could explain Freda's willingness to spread her salary over a longer period of time?

Freda may be bargaining for the deferred payments because she expects to be in

a lowera higherthe same

marginal tax bracket in $2026.$