Which of the following statements regarding realized income is true?
A)Taxpayers need not include realized income in gross income unless a specific provision of the tax code requires them to do so.
B)Realized income requires some type of transaction or exchange with a second party.
C)Once income is realized it may not be excluded from gross income.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

Realized income requires some type of transaction or exchange with a second party. This means that the taxpayer has received an actual payment or benefit that is recognized as income for tax purposes. Options A and C are incorrect as they do not accurately describe the concept of realized income. Option D is incorrect as option B is true.

Which of the Following Statements Regarding Realized Income Is True