What is the test for determining what constitutes taxable income under the Income Tax Code?
Canada (Federal), Canada
The following excerpt is from Gagnon v. The Queen, [1986] 1 SCR 264, 1986 CanLII 54 (SCC):
36. What confirms my view is the restatement of this rule in Rutkin v. United States, 343 U.S. 130 (1952), affirmed in James v. United States, 366 U.S. 213 (1961), in which Warren C.J., at p. 219, cites the restatement in Rutkin, at p. 137: A gain "constitutes taxable income when its recipient has such control over it that, as a practical matter, he derives readily realizable economic value from it." This restatement of the rule for determining what constitutes taxable income emphasizes the benefit the taxpayer derives from income, whatever the way in which it is derived.
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