- 9 - The first issue we consider is whether, during 1988, Sainte Claire constructively received the principal of the 1968 note.6 Section 451(a) provides that any item of gross income received by a taxpayer is to be included in the gross income for the taxable year in which received, unless the item is to be properly accounted for during a different period pursuant to the taxpayer's method of accounting. Section 1.451-1(a), Income Tax Regs., provides that taxpayers using the cash receipts and disbursements method of accounting, which Sainte Claire did during relevant times, shall include in gross income amounts when actually or constructively received. Section 1.451-2(a), Income Tax Regs., describes the doctrine of constructive receipt as follows: Income although not actually reduced to a taxpayer's possession is constructively received by him in the taxable year during which it is credited to his account, set apart for him, or otherwise made available so that he may draw upon it at any time, or so that he 5 (...continued) Sec. 1.1374-1A(c)(1)(i)(A), Income Tax Regs. See generally Warrensburg Bd. & Paper Corp. v. Commissioner, 77 T.C. 1107 (1981). The exception provided by former sec. 1374(c)(1) does not apply to Sainte Claire. 6 In briefing this issue, both parties discuss Vaughn v. Commissioner, 81 T.C. 893 (1983), modified 87 T.C. 164 (1986); however, neither party notes that this Court subsequently reconsidered its holding that the taxpayer had constructively received the proceeds of an installment sale. Vaughn v. Commissioner, 87 T.C. 164, 167 (1986), modifying 81 T.C. 893 (1983). In reconsidering that holding, this Court also stated that the discussion of constructive receipt in the earlier opinion should be disregarded. Id. at 168 n.2. Accordingly, we do not consider the opinion cited to us by the parties.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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