Question

3. True or False. An advance payment received in June 2019 by an accrual basis and calendar year taxpayer for services to be provided over a 36-month period, can be spread over the 36 month period for tax reporting purposes?

Answer 1

Answer:

True

Explanation:

In this case, the advancement payment can help with the payment of the money owned by the taxpayer over a definite period of time. This enables a step-wise payment of the monies that will be owed over a flexible time period, in this case, the period of 36 months that translates to the three-year period. In this period, the tax can be paid in small amounts with an increment in the interest as applicable.