For purposes of determining gross income, which of the following is true?
A)A mechanic completed repairs on an automobile during the year and collects money from the customer.The customer was not satisfied with the repairs and sued the mechanic for a refund.The mechanic can defer recognition of the income until the suit has been settled.
B)A taxpayer who finds a wallet full of money is required to recognize income even though someone may eventually ask for the return of the money.
C)Embezzlement proceeds are not included in the embezzler's gross income because the embezzler has an obligation to repay the owner.
D)All of these are false.
E)All of these are true.

Question

Quizplus · Accepted Answer

According to the tax law, found property is included in gross income and is therefore taxable. Option A is false because the mechanic has earned the income by completing the repairs, and the dispute with the customer doesn't change that fact. Option C is false because embezzlement is still considered income despite the obligation to repay it.

For Purposes of Determining Gross Income, Which of the Following