How Is the Source of Income Determined for the Purpose

question 18

Essay

How is the source of income determined for the purpose of taxation? Briefly identify the sourcing rules for the following types of income: dividends, services, sales of inventory and income from property.

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Definitions:

Articles of Confederation

The first constitution of the United States, ratified in 1781, which was replaced by the US Constitution in 1789 due to its weaknesses in central authority.

Revolutionary War

The conflict (1775-1783) between the thirteen American colonies and Great Britain, leading to the independence of the United States.

Louisiana Purchase

The acquisition of the territory of Louisiana by the United States from France in 1803, doubling the size of the U.S. and opening the west for expansion.

Virginia Plan

A proposal at the Constitutional Convention (1787) that called for a national government with three branches and a two-chamber legislature with representation based on state population.