Rachel paid $1,000 for supplies in 2016.In 2017,the vendor finds a $200 mistake on the invoice and refunds the overpayment to Rachel.Which of the following doctrines or concepts is the least helpful in determining how the 2017 transaction should be reported for tax purposes?

Question

Quizplus · Accepted Answer

The Assignment of Income doctrine is not relevant in this scenario because Rachel did not assign any income to another party. The other choices all provide guidance on how to deal with the $200 refund for tax purposes. The Accounting Period concept determines which year the refund should be included in, the Tax Benefit Rule requires the taxpayer to adjust their tax return for any benefit received in the prior year, the Claim of Right doctrine allows the taxpayer to claim a deduction or credit for the amount of the refund, and the All-Inclusive Income concept requires the taxpayer to include all sources of income, including refunds, on their tax return.

Rachel Paid $1,000 for Supplies in 2016