Which of the following statements regarding realized income is true?

Question

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Realized income requires a transaction or exchange with a second party. This means that income has been received through a barter, sale, or exchange of property or services. Without a transaction or exchange, income cannot be considered as realized income. Option B is incorrect because all income, whether realized or not, must be included in the taxpayer's gross income unless excluded by a specific provision of the tax code. Option C is incorrect because realized income may be excluded from gross income under certain circumstances, such as when it falls under a specific exclusion provision of the tax code. Option D is incorrect because option A is true.

Which of the Following Statements Regarding Realized Income Is True