The tax concept and economic concept of income are in agreement on which of the following:

Question

Quizplus · Accepted Answer

Both the tax concept and economic concept of income agree that rent income should be recognized in the year in which it is received, regardless of when it was earned. Therefore, rent income for 2019 collected in 2018 is income for 2018. However, the fair rental value of an owner-occupied home and the increase in value of assets held for the entire year may not be included in income under the economic concept of income, while they may be included under the tax concept of income. Therefore, choices A and B are not in agreement between the two concepts.

The Tax Concept and Economic Concept of Income Are in Agreement