Ophra Is a Cash Basis Taxpayer Who Is Employed in the Publishing

question 134

Multiple Choice

Ophra is a cash basis taxpayer who is employed in the publishing industry. This year her employer informed her that because of her outstanding performance she is entitled to a free world cruise. Ophra asked her employer to issue the cruise tickets to her parents, and he complied with this request. Identify the principle that will determine whether Ophra or her parents are taxed on the value of the cruise tickets:

• A) Assignment of income
• B) Constructive receipt
• C) Return of capital principle
• D) Wherewithal to pay
• E) All of the above

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Definitions:

Jacob van Ruisdael

A Dutch painter of the Golden Age, renowned for his landscapes depicting the Dutch countryside, emphasizing dramatic skies, rugged terrains, and a deeply moody atmosphere.

Specialized

Having a particular area of expertise or focusing on a specific subset of a larger field, often requiring detailed knowledge or skill.

Landscapes

This term relates to visual arts, describing artworks that depict natural scenery such as mountains, valleys, trees, rivers, and forests.

Inanimate Objects

Items that do not possess life, often depicted in art to convey symbolism, enhance the composition, or provide context.