Tim Purchased State of Idaho General-Purpose Bonds at a Cost

question 51

Multiple Choice

Tim purchased State of Idaho general-purpose bonds at a cost of $3,400 in 2012. He receives $170 interest on the bonds in 2012, 2013, and 2014. In 2014, he sells the bonds for $3,800. Tim excludes the bond interest, but must include a $400 capital gain in his 2014 gross income. Which of the following Concepts, Constructs, and/or Doctrines help in forming the basis for this treatment? I. Constructive Receipt Doctrine. II. All-inclusive Income Concept.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements are correct.
• D) Neither statement is correct.

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