Asked by hector batalla on May 12, 2024
Verified
If a taxpayer is economically better off because of a transaction,the person must normally record income.
Economically Better Off
A condition where an individual or community experiences an improvement in financial situation, often measured by increases in income, wealth, or standard of living.
Transaction
A Transaction is an exchange or transfer of goods, services, or funds between two or more parties.
Income
Income encompasses the money or assets that an individual or business receives, usually in exchange for providing a good or service or through investing capital.
- Recognize the circumstances under which a taxpayer must report income and the impacts of economic benefits on taxability.
Verified Answer
BR
Brianna roblesMay 13, 2024
Final Answer :
True
Explanation :
According to the general principle of taxation, income is defined as any economic benefit received by a taxpayer. Therefore, if a taxpayer is economically better off because of a transaction, it is likely to be considered as income and should be reported for tax purposes. Exceptions may apply in some specific situations or under certain circumstances, so it is important to consult with a tax professional for guidance.
Learning Objectives
- Recognize the circumstances under which a taxpayer must report income and the impacts of economic benefits on taxability.