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:

Leisure

Free time when an individual is not working and can relax, enjoy hobbies, or undertake recreational activities.

Social Media

Digital platforms that enable users to create, share content, and participate in social networking.

Recreation

Activities done for enjoyment, leisure, or relaxation outside of one's regular duties or work.

Leisure

Free time when one is not working or attending to other duties, often used for relaxation, entertainment, or hobbies.