Mr. Crum, an architect, billed a client $12,500 for professional services rendered. When Mr. Crum received a check in full payment from the client, he endorsed the check and mailed it to his college-age son, Paul, who cashed it and deposited the $12,500 in his own bank account. Which of the following statements is a correct application of the assignment of income doctrine?

Question

Quizplus · Accepted Answer

The assignment of income doctrine stipulates that income is taxed to the individual who earns it, regardless of who ultimately receives the income. In this case, Mr. Crum must report the $12,500 as income because he earned it through his professional services, even though he gave the check to his son.

Mr Crum, an Architect, Billed a Client $12,500 for Professional