Constructive receipt

Constructive receipt is a taxation concept under which a taxpayer is assumed to have received income even if the income has not yet been physically received, which must then be reported for the calculation of income taxes. The concept is used to ensure that tax payments are not unreasonably delayed by taxpayers. For example, a cash basis taxpayer receives a check payment from a customer near the end of the tax year, but elects not to cash the check until the following year. Under the constructive receipt concept, the taxpayer is assumed to have received the income when the check was received, not when the check was cashed.