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taxation

constructive receipt of income

Constructive receipt of income is a tax term which determines when a cash-basis taxpayer has received income. Constructive receipt of income occurs when a party obtains income that is not yet physically received but has been credited to the taxpayer's account and over which they have immediate control.

cost basis

Also called tax basis, cost basis is the original cost of acquiring a property (usually its purchase price plus any commissions or fees), for tax purposes. It is primarily used for computing capital gain or loss from the transfer of property and is described either in terms of the dollar amount spent or the per share price paid to acquire property. For gifts, a beneficiary’s cost basis is the same as that of the original holder who gave the gift.

deductible business expense

Deductible business expense is a very broad category of deductions allowed for businesses because the Internal Revenue Service (IRS) tries to tax business profits, not revenue. Deductible business expenses has been given a broad definition with courts allowing any expense that is “ordinary and necessary” for the producing income.

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