The Claim-of-Right Doctrine
I.explains why Carla does not report $10,000 of income on her tax return when she borrows $10,000 from the First Savings Bank.
II.differs from the constructive receipt doctrine in that constructive receipt applies where an amount has been received,and the tax question is whether the amount is taxable in the current year.
III.explains why Samuel reports $45 of interest credited to his savings account on December 31,2017,on his 2016 tax return,even though he does not actually receive the cash in 2017.
IV.applies when a taxpayer has no definitive obligation to repay the amount received.

Question

The Claim-of-Right Doctrine
I.explains why Carla does not report $10,000 of income on her tax return when she borrows $10,000 from the First Savings Bank.
II.differs from the constructive receipt doctrine in that constructive receipt applies where an amount has been received,and the tax question is whether the amount is taxable in the current year.
III.explains why Samuel reports $45 of interest credited to his savings account on December 31,2017,on his 2016 tax return,even though he does not actually receive the cash in 2017.
IV.applies when a taxpayer has no definitive obligation to repay the amount received.
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Quizplus · Accepted Answer

Statement I is correct because the Claim-of-Right doctrine allows a taxpayer to exclude income if the taxpayer has an honest belief that they have the right to the income and that belief is reasonable under the circumstances.
Statement IV is correct because the Claim-of-Right doctrine applies when the taxpayer has no obligation to repay the amount received. Statements II and III are incorrect because they describe the constructive receipt doctrine, which is different from the Claim-of-Right doctrine.

The Claim-Of-Right Doctrine I.explains Why Carla Does Not Report $10,000 of Income on of Income