37574441
Description
Mind Map by Lucille Lamberson, updated more than 1 year ago
|
Created by Lucille Lamberson
over 1 year ago
|
|
Chapter 5: Gross Income and Exclusions
- Realization Principle
- Income is realized when a taxpayer engages in a transaction with another party and the
transaction results in a measurable change in property rights
- Income is realized when a taxpayer engages in a transaction with another party and the
transaction results in a measurable change in property rights
- Gross Income
- All income from whatever source derived unless excluded by law
- All income from whatever source derived unless excluded by law
- Taxpayers must receive an economic benefit to have gross income
- Examples of economic benefit
- Compensation for services, proceeds from
property sales, and income from investments or
business activities
- Compensation for services, proceeds from
property sales, and income from investments or
business activities
- Examples of economic benefit
- Accrual method
- Income is generally recognized when earned and expenses are
generally deducted in the period when liabilities are incurred
- Income is generally recognized when earned and expenses are
generally deducted in the period when liabilities are incurred
- Cash method
- Taxpayers recognize income in the period they
receive it, no matter when they actually earn it
- Taxpayers recognize income in the period they
receive it, no matter when they actually earn it
Want to create your own Mind Maps for free with GoConqr? Learn more.