1.26 Ark. Code R. 51-404(a)(1)

Current through Register Vol. 49, No. 9, September, 2024

Rule 1.26-51-404(a)(1) - Classes of Income

The tax imposed by the Income Tax Act is upon net income. In the computation of the tax, various classes of income must be considered.

(a) Income, meaning all wealth which flows into the taxpayer other than a mere return of capital, includes the forms of income specifically described as gains and profits including gains derived from the sale or other disposition of capital assets. Many factors must be taken into consideration in accurately determining income, among which are inventories, accounts receivable, property exhaustion and accounts payable for expenses incurred.

(b) Gross income is all wealth other than a return of capital received during a tax year less income which is, by statutory provisions or otherwise, exempt from the tax imposed by the Act.

(c) Net income is gross income less statutory deductions. The statutory deductions are in general, though not exclusively, expenditures other than capital expenditures connected with the production of income.

1.26 Ark. Code R. 51-404(a)(1)