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Gross income is commonly defined as the amount of a company's or a person's income before all deductions or any taxpayer’s income, except that which is specifically excluded by the Internal Revenue Code, before taking deductions or taxes into account. For a business, this amount is pre-tax net sales less cost of sales. "Gross income" in accordance to the IRS, is defined in the Internal Revenue Code 61. There are exceptions to this definition under Sections 101-140 of the Internal Revenue Code. Each of these sections excludes a particular type of inflow if it meets the criteria stated. Image File history File links Question_book-3. ... Look up company in Wiktionary, the free dictionary. ... For other uses, see Person (disambiguation). ... The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes... Tax rates around the world Tax revenue as % of GDP Part of the Taxation series        Section 61 of the Internal Revenue Code (IRC 61, ) defines gross income, the starting point for determining which items of income are taxable for federal income tax purposes in the United States. ...

For the purpose of a company's description of an employee's income, the term annual earnings may be used because a person may have other sources of taxable income in a year, apart from what is earned from the employer. For instance, cashing out a Canadian Registered Retirement Savings Plan results in additional income that must be claimed as part of total world income. Purpose in its most general sense is the anticipated aim which guides action. ... . ...

Further description of the items included in gross income per the IRS, are in Part II of Subchapter B of Chapter 1 of the Internal Revenue Code. Items specifically excluded from gross income are listed in Part III of the same subchapter.

The U.S. Supreme Court has stated that Gross income can be seen as an undeniable succession to wealth which requires an inflow of cash, noncash property, services, or even psychic satisfaction in excess on a taxpayer’s return of actual capital. Realization for tax purposes requires severance and dominion and control. Severance means that the gain must be legally or physically separable from the producer of the gain. Dominion and control means that the gain is readily available for the taxpayer’s separate use. Federal courts Supreme Court Circuit Courts of Appeal District Courts Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties State & Local government Governors Legislatures (List) State Courts Local Government Other countries Atlas  US Government Portal      The Supreme Court of the United States (sometimes colloquially referred to by the... Succession is the act or process of pooing or of following in order or sequence. ...

Accounting methods

Three methods for determining when an inflow is included in gross income are the cash method, the accrual method, and the hybrid method. Under the cash method system a taxpayer reports gross income at the time of actual or constructive receipt of actual cash or cash equivalence. The accrual method requires taxpayers to report income when the recipient has a legal right to the gain, when the amount of the gain is reasonably certain to determine, and when the ultimate receipt is reasonably certain. The final method is the hybrid method which combines the cash method and the accrual method.

Accession

An undeniable accession to wealth requires an inflow of cash, noncash property, services, or other satisfaction in excess of the initial capital invested. For example, if David purchases a suitcase for $300 in October and sells it in November for $400, he has received gross income of $100 (the $400 received minus his $300 basis). This is also true for services. If Claire performs medical services worth $300 for her childcare provider, and in exchange receives $425 of childcare at no cost, her income is $125 (the $425 worth of value received minus her $300 basis).

Realization

Realization involves two components: severance, and dominion and control. Severance means that the gain is physically separable from the producer of the gain. For example, Sarah owns a house for which she paid $150,000 in 1995. In 2003, Sarah still owns the house buts its fair market value has increased to $400,000. Sarah does not realize the $250,000 increase because it is not physically separable from the house.

Dominion and control means that the amount is available for immediate use, benefit, or disposal by the taxpayer.

Federal income tax implications of receipt of gold or silver coins

Some people have argued that with respect to the receipt of gold or silver coins, taxpayers need only report as income the "face value," and not the higher actual fair market value, of the coins. The courts have uniformly rejected these attempts. In the Joslin case, the United States Court of Appeals for the Tenth Circuit ruled that under 26 U.S.C. § 61 and 26 C.F.R. 1.61-2(d)(1), a taxpayer who bargains to be paid for his services in legal tender (in this case, silver dollar coins) must report the income at the fair market value (numismatic value), and not at the lower face value.^[1] Similarly, in the Cordner case, the United States Court of Appeals for the Ninth Circuit ruled that a taxpayer who receives Double Eagle gold coins as a distribution from a corporation must report as income the fair market value of the coins, not the lower face value.^[2] In this case, where a coin, by reason of its value to collectors or by reason of the intrinsic worth of its contents, has a fair market value in excess of its face value, it is treated as "property other than money" for purposes of 26 U.S.C. § 301, resulting in taxation at fair market value.^[3] The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes... The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes...

The Ninth Circuit Court has ruled that under 26 U.S.C. § 1001, in the exchange of Swiss francs for U.S. Double Eagle gold coins, the taxpayer is taxed at the aggregate fair market value, and not the lower face value.^[4] In this case, the taxpayer and the government argued about whether the Double Eagle coin was legal tender. The court stated that it would not have to decide the issue. The court stated: "Because the key element is the excess of market value over face value, it is immaterial that such coins may be legal tender at their face value."^[5] The Internal Revenue Code (or IRC) (more formally, the Internal Revenue Code of 1986, as amended) is the main body of domestic statutory tax law of the United States organized topically, including laws covering the income tax (see Income tax in the United States), payroll taxes, gift taxes, estate taxes... ISO 4217 Code CHF User(s) Switzerland, Liechtenstein, Campione dItalia Inflation 1. ...

In still another case, a taxpayer’s argument – that gold and silver coins should, for Federal income tax purposes, be valued at their face value, while foreign coins, in general, should be valued according to their precious metal content – was rejected. The court stated: "Coins which are not currently circulating lender tender are property to be valued at their fair market value for purposes of section 1001(b) [. . . citation omitted . . . ] This result is unaffected by the fact that such coins may still be used as legal tender at their face value."^[6]

Taxpayers have attempted to argue that the Cordner Doctrine (see above) should not apply where the coins remain in circulation, as the coins in the Cordner case (gold coins) had been withdrawn from circulation. This argument has been rejected. In the Stoecklin case, the court ruled that the taxpayer who receives coins (in this case, silver dollar coins) as compensation for services is taxed at the fair market value of the coins, not the lower face value, regardless of whether or not the coins have been withdrawn from circulation.^[7] Similarly, in the case of United States v. Kahre, the criminal defendants’ arguments -- that where gold or silver coins are currently circulating, the taxpayer may report the coins as income at their face value and not at the higher fair market value -– were rejected.^[8] The Kahre case also made news because although the defendants lost their argument that the receipt of circulating coins could be taxed at the lower face value, the defendants were ultimately acquitted of the criminal charges against them.^[9]

Notes

See also

• Gross profit
• Gross margin
• Net income