Tim purchased State of Idaho general-purpose bonds at a cost of $3,400 in 2012. He receives $170 interest on the bonds in 2012, 2013, and 2014. In 2014, he sells the bonds for $3,800. Tim excludes the bond interest, but must include a $400 capital gain in his 2014 gross income. Which of the following Concepts, Constructs, and/or Doctrines help in forming the basis for this treatment? I. Constructive Receipt Doctrine. II. All-inclusive Income Concept.

Question

Quizplus · Accepted Answer

The All-inclusive Income Concept requires that all income, from whatever source derived, be included in gross income unless specifically excluded by law. The $400 capital gain is included in Tim's gross income under this concept. The Constructive Receipt Doctrine is not applicable here as it pertains to the timing of income recognition, not the inclusion of capital gains.

Tim Purchased State of Idaho General-Purpose Bonds at a Cost