Darla paid $$2,300$ in state income taxes in Year $1.$ She did not itemize her deductions in Year $1$ because the standard deduction was more than her itemized deductions. It turns out that Darla's actual state income tax liability for Year $1$ was only $$2,000.$ Thus, she received a $$300$ state income tax refund during Year $2$ representing her overpayment of state income taxes for Year $1.$ When Darla completes here income tax return for Year $2,$

She must include in her gross income the $$300$ state income tax refund because of the tax benefit rule.

She must include in her gross income the $$300$ state income tax refund because of the assignment of income doctrine

She must include in her gross income the $$300$ state income tax refund because of the wherewithal to pay concept

She does not include in her gross income the $$300$ state income tax refund because of the tax benefit rule.

She does not include in her gross income the $$300$ state income tax refund because of the assignment of income doctrine.