Match Each Statement with the Correct Term Below

question 19

Multiple Choice

Match each statement with the correct term below.
-Substance Over Form Doctrine

• A)Taxpayer reports income when received in cash or its equivalent and takes deductions as they are paid.
• B)A deduction taken in one year that is recovered in a later year is reported as income in the year of recovery to the extent that the deduction reduced taxable income.
• C)Taxpayer reports income as earned and deductions as incurred.
• D)The result of an arms-length transaction.
• E)Exclusions and deductions result from specific acts of Congress that must be strictly applied and interpreted.
• F)The taxability of a transaction is determined by the reality of the transaction rather than some contrived appearance.
• G)The reporting of an item of income or expense on a tax return
• H)No income is realized until the taxpayer's invested capital is recovered.
• I)All income received is taxable unless some specific provision of the tax law allows exclusion of the item.
• J)These taxpayers are not deemed to transact at arms-length.

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Definitions:

Gibbons v. Ogden

A landmark 1824 Supreme Court case that held the power to regulate interstate commerce was granted to Congress by the Commerce Clause of the U.S. Constitution.

Commerce

Trade among the several states or between any foreign country and any state or territory.

Congress

The national legislative body of the United States, consisting of the Senate and the House of Representatives.

Trademark

Any word, name, symbol, or device adopted and used by a manufacturer or merchant to identify goods and distinguish them from those manufactured or sold by others.