Identify the Rule Dictating That on Sale of an Asset

question 64

Multiple Choice

Identify the rule dictating that on sale of an asset a taxpayer need only include the incremental gain in gross income rather than the entire proceeds from the sale.

• A)Tax benefit rule
• B)Constructive receipt
• C)Return of capital principle
• D)Wherewithal to pay
• E)None of the choices are correct.

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Definitions:

Fundamental Attribution Error

The inclination to give too much importance to individual traits and overlook the influence of circumstances when evaluating the actions of others.

Situational Attributions

The process of explaining one's own or other people's behavior as the result of external factors, such as the context or the situation.

Cognitive Dissonance

A psychological concept referring to the mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time.

Western Countries

Nations primarily located in the Western hemisphere, often characterized by democratic forms of government and capitalist economies.