Question

In general, the fruit and tree doctrine attributes:

1. income from property to the taxpayer who owns the property

2. income received by a taxpayer’s agent to the agent

3. income received from services to the taxpayer whoever receives the income

4. all of the above

5. none of the above

The constructive receipt doctrine applies to:

a. accrual basis taxpayers only

b. cash basis taxpayers only

c. individual taxpayers only

d. corporate taxpayers only

e. married taxpayers only

Answer 1

Ans ::c. individual taxpayers only

Accounting methods are the means of recording when income is received and expenses are paid so that profit can be determined for a specific time period, called the accounting period. It is the means by which a business can measure its own success and by which the tax authorities can determine taxable income. In some cases, tax law restricts the choice of accounting methods and accounting periods for specific business entities.