Outline for chapter 3 Federal taxation
Outline for Chapter 3
Income Sources
Gross income= all income received, less exclusions from income.
All inclusive income concept (all income received is taxable unless a specific provision in the tax law either excludes the income from taxation or defers its recognition to a future tax year) provides the basis for calculating gross income.
Realization (no income or loss is recognized until it has been realized. A realization involves a changing in the form and/or substance of a taxpayers property rights that result from an arms-length transaction) requires that income be realized before it is included in gross.
Section 61 Gross income defined (a)General Definition- Except as otherwise provided in this subtitle, gross income means all income from whether source derived including (but not limited to) the following items:
1. Compensation for services, including fees, commissions, and similar items:
2. Gross income derived from business
3. Gains derived from dealing in property
4. Interest
5. Rents
6. Royalties
7. Dividends
8. Alimony and separate maintenance payments
9. Annuities
10. Income from life insurance and endowment contracts
11. Pensions
12. Income from discharge of indebtedness
13. Distributive share of partnership gross income
14. Income in respect of a decedent and
Income from an interest in an estate or General Definition= Gross income means all income from whatever source derives unless excluded by law. Gross income includes income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, private property, as well as in cash.
Income is derived from labor and Capital
Supreme Court ruled in 1920 that income may be defined as the gain derived from capital, from labor, or from both combined, provided it is understood to include profit gained through sale or conversion of capital assets.
Income from Labor= Income from sole
Income Sources
Gross income= all income received, less exclusions from income.
All inclusive income concept (all income received is taxable unless a specific provision in the tax law either excludes the income from taxation or defers its recognition to a future tax year) provides the basis for calculating gross income.
Realization (no income or loss is recognized until it has been realized. A realization involves a changing in the form and/or substance of a taxpayers property rights that result from an arms-length transaction) requires that income be realized before it is included in gross.
Section 61 Gross income defined (a)General Definition- Except as otherwise provided in this subtitle, gross income means all income from whether source derived including (but not limited to) the following items:
1. Compensation for services, including fees, commissions, and similar items:
2. Gross income derived from business
3. Gains derived from dealing in property
4. Interest
5. Rents
6. Royalties
7. Dividends
8. Alimony and separate maintenance payments
9. Annuities
10. Income from life insurance and endowment contracts
11. Pensions
12. Income from discharge of indebtedness
13. Distributive share of partnership gross income
14. Income in respect of a decedent and
Income from an interest in an estate or General Definition= Gross income means all income from whatever source derives unless excluded by law. Gross income includes income realized in any form, whether in money, property, or services. Income may be realized, therefore, in the form of services, meals, accommodations, stock, private property, as well as in cash.
Income is derived from labor and Capital
Supreme Court ruled in 1920 that income may be defined as the gain derived from capital, from labor, or from both combined, provided it is understood to include profit gained through sale or conversion of capital assets.
Income from Labor= Income from sole