Named the #9 fastest growing education company in the United States. Thank you for your support!
The Tax-Benefit Rule
Learn about the rule that if a taxpayer recovers an expense item previously deducted, that amount may be includable in a later year's gross income.
Transcript
Introduction, General Rules
In this lesson, we'll study the tax-benefit rule. As we've learned, the federal income-tax system operates on annual accounting. Generally, each taxable year stands by itself. A taxpayer's liability for one taxable year is computed based on income and expenditures for that year. Events in prior years are generally disregarded.
Unbending adherence to pure annual accounting would produce lots of distortions and inequities. Thus, Congress and the courts have devised...
Alert
To read the full transcript, please start your free trial or log in.