When Is Income Realized? — Roswell Magill
The Langenderfer Library: Classics in Tax, Economics, and AccountingShow Notes
When does an economic gain become taxable income? In this influential 1933 Harvard Law Review article, tax scholar Roswell Magill examines the realization requirement through Supreme Court decisions, statutory rules, and accounting practice, distinguishing increases in value from gains sufficiently received, controlled, or fixed to enter the tax base.
Magill compares cash and accrual methods, explores constructive receipt, cash equivalents, contested claims, sales, notes, escrow arrangements, and the problem of assigning income to the proper year. His analysis reveals realization not as a single mechanical event, but as a practical legal framework shaped by administrability, valuation, and the need to reflect income clearly—a framework that still structures federal income-tax doctrine today.
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