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:
“As the Arab proverb says, “The dog barks and the caravan passes”. After having dropped this quotation, Mr. Norpois stopped to judge the effect it had on us. It was great; the proverb was known to us: it had been replaced that year among men of high worth by this other: “Whoever sows the wind reaps the storm”, which had needed some rest since it was not as indefatigable and hardy as, “Working for the King of Prussia”.”
—Marcel Proust (1871–1922)
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—Zick Rubin (20th century)