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A cash basis taxpayer should report gross income:
Suggested Answer: D
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Choice 'd' is correct. A cash basis taxpayer should report gross income for the year in which income is either actually or constructively received, whether in cash or in property.
Choice 'a' is incorrect. Income also be constructively received in property - not only actually in cash.
Choice 'b' is incorrect. Income also be constructively received - not only actually.
Choice 'c' is incorrect. Income also be received in property - not only cash.
8 comments · newest first
LO
Louvenia
11 months ago
B is misleading, it’s all about cash received!
TI
Timothy
12 months ago
Wait, is it really just cash? That seems too simple.
CR
Cristal
12 months ago
A sounds right, but what about constructive receipt?
CE
Cecil
12 months ago
I think it's D, gotta include property too.
LE
Lera
1 year ago
Definitely A, cash basis means cash only!
VA
Vanesa
1 year ago
Okay, let's see. Top-down approaches typically aim to streamline and centralize decision-making, so I'm guessing the answer is that they decrease the long-term governance burden.
TO
Tori
1 year ago
I think "gain or loss on revaluation of a non-current asset" might be the right choice for comprehensive income. It seems to fit the definition we discussed.
JI
Jimmie
1 year ago
Key steps: original value is $1M, depreciation is 50%. That means current value is $500,000. So the unassumed risk is probably the full $500,000. Option A looks right.