Wherewithal-to-pay represents the principle that a realized transaction should require a taxpayer to sell other assets in order to pay income taxes.

Question

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Wherewithal-to-pay is a tax principle that suggests taxpayers should be taxed when they have the means to pay, typically when they have received cash or its equivalent, not necessarily requiring them to sell other assets.

Wherewithal-To-Pay Represents the Principle That a Realized Transaction Should Require