Which of the following statements regarding realized income is true?
A)Taxpayers need not include realized income in gross income unless a specific provision of the tax code requires them to do so.
B)Realized income requires some type of transaction or exchange with a second party.
C)Once income is realized it cannot be excluded from gross income.
D)None of these statements are true.

Question

Quizplus · Accepted Answer

Realized income requires some type of transaction or exchange with a second party. This is the definition of realized income as per the tax code. The other statements in the options are not entirely true. Taxpayers may need to include realized income in gross income even if there is no specific provision requiring them to do so, and some realized income may be excluded from gross income under certain circumstances.

Which of the Following Statements Regarding Realized Income Is True