Question

Parker is a dog whisperer who has consulted with some of the most famous Hollywood stars and their canine friends. He issued an invoice on December 1st and received a check in the mail on December 30th. Which of the following doctrines requires that he includes the income as taxable in the current year and not defer it to the following year?
A. The doctrine of constructive receipt.
B. The economic benefit doctrine.
C. The doctrine of the fruit and the tree.
D. All of the above are key tax principles underling personal income taxation.

Answer 1

Parker is a dog whisperer who has consulted with some of the most famous Hollywood stars and their canine friends. He issued an invoice on December 1st and received a check in the mail on December 30th. The following doctrines requires that he includes the income as taxable in the current year and not defer it to the following year

b. The economic benefit doctrine

Explanation:

• The Economic Benefit Doctrine requires that any benefit granted to an individual that has economic or financial value be included as compensation for income tax purposes in the year the benefit is granted.
• The money in the trust was for the sole benefit of the employee, and non-forfeitable.
• A tax doctrine that applies to cash basis taxpayers who receive compensation for services. It provides that a taxpayer is taxed when the taxpayer receives an "economic benefit" from an absolute right to receive property in the future.
• Economics is important for many areas of society. It can help improve living standards and make society a better place. Economics is like science in that it can be used to improve living standards and also to make things worse.