Claim-of-right Doctrine

Claim-of-right Doctrine

Claim-of-right Doctrine means:
the judicial doctrine that an amount is includable in gross income upon actual or constructive receipt as long as the taxpayer has an unrestricted claim to the amount. If it is determined in a later year that the taxpayer did not have an unrestricted claim to the amount, a deduction is allowable in that later year. Former IRC (check if this IRC provision is current here) §1341. If any amount is later required to be repaid, the taxpayer may deduct the repayments in the tax year in which they are made. The repayment can be treated as a deduction to reduce the tax liability in the year of repayment, or the tax for the year in which the income was originally reported can be recalculated and a refund claimed. See also claim for refund. Former IRC (check if this IRC provision is current here) §§1341 and 6411(d).


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