The tax concept and economic concept of income are in agreement on which of the following:

Question

Quizplus · Accepted Answer

Both the tax concept and economic concept of income agree that income is recognized when it is received, regardless of when it was earned or accrued. Therefore, rent income collected in 2013 for the 2014 tax year should be included in 2013 income. However, the economic concept of income differs from the tax concept in that it does not necessarily include the fair rental value of an owner-occupied home or the increase in value of assets held for the entire year in taxable income for the year.

The Tax Concept and Economic Concept of Income Are in Agreement