*All-inclusive Income Concept provides the basis for calculating gross income/any
income received is assumed to be taxable unless some provision in the tax law allows its
exclusion. all income from whatever source derived
Realization concept req
Taxable income = gross income allowable deductions
Individual taxpayer is allowed a PERSONAL EXEMPTION of $4,000 (raised each year
to account for inflation)
Individuals are also allowed a dependency exemption for each qualifying depe
Chapter 4 Notes
All-inclusive income concept: considers taxable income any income received unless a
specific provision can be found that exempts the item from taxation.
Legislative grace concept: only Congress can provide such tax relief
Tax an enforced contribution, exacted pursuant to legislative authority in the exercise of
the taxing power, and imposed and collected for the purpose of raising revenue to be used
for public or government purposes.
The payment to the governmen