Tim purchased State of Idaho general-purpose bonds at a cost of $3,400 in 2011.He receives $170 interest on the bonds in 2011,2012,and 2013.In 2013,he sells the bonds for $3,800.Tim excludes the bond interest,but must include a $400 capital gain in his 2013 gross income.Which of the following Concepts,Constructs,and/or Doctrines help in forming the basis for this treatment?
I.Constructive Receipt Doctrine.
II.All-inclusive Income Concept.

Question

Quizplus · Accepted Answer

The All-inclusive Income Concept requires that all income, from whatever source derived, be included in gross income unless specifically excluded by law. The $400 capital gain is included in Tim's gross income under this concept. The Constructive Receipt Doctrine is not applicable here as it pertains to income that is available to a taxpayer without restriction, which is not the case with the capital gain.

Tim Purchased State of Idaho General-Purpose Bonds at a Cost