According to the principle of constructive receipt, when is a payment of an advance considered taxable?

The principle of constructive receipt is an important concept in taxation that determines when income is considered taxable to the recipient. Under this principle, a payment is considered taxable when the taxpayer has unrestricted access to it, meaning they can effectively control it and have the ability to use it without any substantial limitations.

In this context, an advance payment is taxable at the moment the employee receives it, as this is when the employee gains control and access to the funds. At this point, the employee can utilize the cash advance for any purpose, which meets the criteria of constructive receipt. This means that, even if the employee hasn't completed the work for which the advance was given, the mere fact of receipt means the income should be reported for tax purposes in the period it was received.

The other options do not accurately reflect the timing defined by constructive receipt. A payment being issued or documented by the employer may not convey access or control to the employee, and the work's completion is irrelevant in terms of taxation since it depends on when the employee actually gained access to the funds. Thus, only the moment of receipt aligns with the principles of taxation under the constructive receipt doctrine.