Taxpayer received a tax benefit from the prior deduction


Problem: According to our reading, "if a taxpayer receives a refund of state income taxes deducted in a prior year, the taxpayer must include the refund as income in the year of the refund to the extent the taxpayer received a tax benefit from the prior deduction."

What about California's situation where taxpayers are getting IOU's from the state rather than actual cash from the state?

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Accounting Basics: Taxpayer received a tax benefit from the prior deduction
Reference No:- TGS01929182

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