Ch_4_Questions - Income Tax I Name_Christian Yimgnia...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Income Tax I Name __Christian Yimgnia_________ Chapter 4 Questions Explain and/or discuss the following based on reading the chapter and viewing the power points. Be thorough with your answers. You may take all the space you need. Describe in your own words the following terms/concepts. Prove to me you understand the topic. 1. Realization of income. The realization of income is when gain is recognized and recorded when realized. The gain is considered an income when it is recognized and realized for a certain period of time. For example if I buy a land for $5,000 and sell it five years later for $10,000, the $5,000 gain I make on the sale of the land is realizable income. 2. Economic Benefit Doctrine The economic benefit doctrine talks about “what” is income or “what” income is an individual receiving. Therefore any amount of compensation granted or paid to the individual for services rendered should be recognized as gross income. This doctrine basically addresses any benefit an individual might receive in exchange of service and it should be taxed. 3. Constructive Receipt Doctrine The constructive receipt doctrine addresses the “when” of the income. So the income is usually recognized at the time the cash is received and available to the individual. Sometimes income is recognized on an accrual basis, but this doesn’t work with the constructive receipt doctrine. It is only applicable when the individual has absolute right to the compensation.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern