Income is not taxed if a taxpayer's control over the amount earned is subject to substantial restrictions.

Question

Quizplus · Accepted Answer

This statement is true. Income is not taxed if a taxpayer's control over the amount earned is subject to substantial restrictions, such as restrictions on when or how the income can be received or used. This typically applies to certain types of compensation, such as restricted stock or deferred compensation, that are subject to vesting requirements or other limitations on the taxpayer's ability to access the funds.

Income Is Not Taxed If a Taxpayer's Control Over the Amount