Chapter 5, Problem 1DQ

Based on the definition of gross income in §61 and related regulations, what is the general presumption regarding the taxability of income realized?

To determine

Identify the general presumption on taxability of income based on the definition of gross income.

Explanation of Solution

Gross income: The gross income is defined as all income generated from whatever source, unless excepted by law. It includes income in any form like money, services or property.

The general presumption on taxability of income is that the any income which is gained is taxable unless otherwise left out by law.