USA Urgent Lottery Question!!

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Dec 5, 2015
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If I hit a scratch-off in early December and I send it out in early December, but I don't receive the money until January of the following year, what year should the winnings be recognized as income?

Do I have wiggle room? Can I claim it on either year?

Is the day I bought it the day it is recognized? Does the day they process it or the date on the check come into play?

From my understanding of taxes, the prize was won in December, so my gut says it will be taxable in this year as opposed to next year, but I am curious about potential flexibility.
 
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If I hit a scratch-off in early December and I send it out in early December, but I don't receive the money until January of the following year, what year should the winnings be recognized as income?

Do I have wiggle room? Can I claim it on either year?

Is the day I bought it the day it is recognized? Does the day they process it or the date on the check come into play?

From my understanding of taxes, the prize was won in December, so my gut says it will be taxable in this year as opposed to next year, but I am curious about potential flexibility.
I'd ask a tax accountant. For book accounting (accrual) it would probably be this year because you would debit a receivables account and credit revenue this year, then credit receivables and debit cash next year, so on your income statement it would show up as income this year. In Cash accounting it wouldn't show up until cash changed hands, so it wouldn't show up until next year no matter what happened this year. Tax accounting is different, however, it is a different standard and the IRS requires you to recognize income in specific ways, so I'd ask someone who knew about such things (I don't).
 
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It's taxable when you receive the check, and not before. Google, "lottery constructive receipt" without the quotes.
 

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