Gross Income Defined

Gross Income Defined

Learn about the three essential ingredients of gross income: gain, realization, and control.

Transcript

In this lesson, we'll explore the federal-tax definition of gross income. We'll introduce ourselves to both the economist's definition of income and the legal definition of taxable gross income.

Economists have long disagreed on precisely how to define income, but many adopt the so-called Haig–Simons definition. Briefly, this definition posits that income equals the sum of an individual's consumption for personal use plus any increase in net worth over a specific period. See Theodore P....