ACCT 421 Lecture Notes - Lecture 4: Real Estate Transfer Tax, Deferral, Social Security Disability Insurance
3 Oct 2016
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What is gross income: income (broadly conceived) 61(a) : except as otherwise provided in this subtitle, gross income means all income from whatever source derived. When do we count it: depends on the accounting method. Whose is it: assignment of income doctrine (aka the fruit and the tree) Income from services taxed to person who provided them. Income from property taxed to owner: community property states are the exception to the fruit and the tree doctrine. One-half of the income from services earned by a spouse is deemed earned by the other spouse. One-half of the income from property held as community property is deemed earned by each spouse. Income is realized when: the taxpayer has completed a transaction with another party, the transaction results in significant change in the taxpayer"s property rights. Unless both of these happen, income is not realized.
