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Which tax principle applies that allows taxpayers to reduce sales proceeds by the amount of their unrecovered investment (i.e., tax basis) in the property to

Which tax principle applies that allows taxpayers to reduce sales proceeds by the amount of their unrecovered investment (i.e., tax basis) in the property to determine the amount of gain or loss on the sale?

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Return of capital principle.

Assignment of income doctrine.

Amount realized principle.

Constructive receipt principle.

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