In June, Catherine Receives Stock Worth $12,000 as a Graduation

question 73

Multiple Choice

In June, Catherine receives stock worth $12,000 as a graduation present from her Grandfather. The following November she receives an $800 cash dividend on the stock. Catherine must include the $800 dividend in her gross income, but excludes the $12,000 value of the stock received. The income tax concept(s) that require this treatment include:
I.Ability-to-Pay Concept.
II.All-inclusive Income Concept.
III.Constructive Receipt Doctrine.
IV.Legislative Grace Concept.
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• A)Only statement III is correct.
• B)Statements III and IV are correct.
• C)Statements I and III are correct.
• D)Statements II and IV are correct.
• E)Only statement I is correct.

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