Year of Inclusion
A taxpayer must include income as part of taxable income in the year recognized under the taxpayer's method of accounting. Generally, a taxpayer using the cash method of accounting (cash basis taxpayer) recognizes income when received. A taxpayer using the accrual method (accrual basis taxpayer) recognizes income when earned. Income is generally considered earned:
- on sales of property when title to the property passes to the customer, and
- on performance of services when the services are performed.
Read more about this topic: Gross Income
Famous quotes containing the words year and/or inclusion:
“The higher the mountain on which you stand, the less change in the prospect from year to year, from age to age. Above a certain height there is no change.”
—Henry David Thoreau (1817–1862)
“Belonging to a group can provide the child with a variety of resources that an individual friendship often cannot—a sense of collective participation, experience with organizational roles, and group support in the enterprise of growing up. Groups also pose for the child some of the most acute problems of social life—of inclusion and exclusion, conformity and independence.”
—Zick Rubin (20th century)