Slim Aarons is a freelance paparazzo who earns his living by selling candid photos of celebrities...

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Slim Aarons is a freelance paparazzo who earns his living by selling candid photos of celebrities to tabloid magazines. On December 15, Year 1 , Slim photographs Fred Jolly, a movie star, walking hand in hand on a Cancun beach with Angie Patt, also a movie star. Fred's wife, Jennifer Anderson, is nowhere in the picture. Slim sells the non-exclusive right to publish the picture one time for $100,000 to the National Investigator, a.k.a., "The Gator". Assuming Slim is a cash method taxpayer and The Gator is an accrual method taxpayer, when does Slim have income and when does The Gator have a deduction under the following circumstances? (a) Slim delivers the picture to The Gator on December 27th. The Gator cuts a check on December 28th and mails it to Slim's home. Slim receives the check on December 31st and cashes the check on January 2nd of Year (b) Same as (a) except Slim is out of town on December 31st. (c) Same as (a) except that the check arrives at Slim's home on January 2nd of Year 2. (d) Same as (a) except that Slim delivers the picture to The Gator on January 2nd of Year 2. (e) Same as (a) except that Fred and Angie sue Slim à December 30th of Year 1 claiming that he violated their rights of privacy and that, consequently, he must pay them the proceeds from his sale of the picture to The Gator. Slim denies their claim. Slim Aarons is a freelance paparazzo who earns his living by selling candid photos of celebrities to tabloid magazines. On December 15, Year 1 , Slim photographs Fred Jolly, a movie star, walking hand in hand on a Cancun beach with Angie Patt, also a movie star. Fred's wife, Jennifer Anderson, is nowhere in the picture. Slim sells the non-exclusive right to publish the picture one time for $100,000 to the National Investigator, a.k.a., "The Gator". Assuming Slim is a cash method taxpayer and The Gator is an accrual method taxpayer, when does Slim have income and when does The Gator have a deduction under the following circumstances? (a) Slim delivers the picture to The Gator on December 27th. The Gator cuts a check on December 28th and mails it to Slim's home. Slim receives the check on December 31st and cashes the check on January 2nd of Year (b) Same as (a) except Slim is out of town on December 31st. (c) Same as (a) except that the check arrives at Slim's home on January 2nd of Year 2. (d) Same as (a) except that Slim delivers the picture to The Gator on January 2nd of Year 2. (e) Same as (a) except that Fred and Angie sue Slim à December 30th of Year 1 claiming that he violated their rights of privacy and that, consequently, he must pay them the proceeds from his sale of the picture to The Gator. Slim denies their claim.

Answer rating: 100% (QA)

a Slim has income on December 27th when he delivers the picture to The Gator The Gator has a deducti... View the full answer