Does the fact that an item of income is paid in a form other than cash mean it is$$ nontaxable? Explain.

Question content area bottom

Part $1$

A$.$

Yes. Gross income is limited to amounts received in the form of$$ cash, not property or services.

B$.$

No$.$ The general rule is the method of payment does not matter. For barter transactions which are direct exchanges of property and$$ services, only one party to the transaction is taxed on the value of the property or services received in the exchange.

C$.$

No$.$ The form of payment is usually unimportant. The important question is whether the taxpayer receives economic benefit.

D$.$

No$.$ The main issue is whether the taxpayer receives any form of a personal benefit. Such as a grandfather transferring stocks and bonds to his grandson for a college$$ education; this transaction is taxable.