Which of the following is NOT considered a taxable receipt under the cash basis?

The concept of taxable receipts under the cash basis of accounting refers to income that a taxpayer recognizes when it is actually received, rather than when it is earned. In the context of the options given, cash received from the sale of a building is indeed a taxable receipt, but it can also have implications regarding capital gains, which is a different aspect of taxation where the gain (the profit from the sale) is taxed rather than the receipt itself.

However, in this scenario, it is essential to note that cash received from the sale of a building typically involves a more complex determination of taxable income, as it also accounts for any gain realized upon the sale. This may lead some to misunderstand how and when receipts are considered taxable under various circumstances.

In contrast, income from a business service, cash received from selling machinery, and income from interest are straightforward taxable receipts recognized in the period they are received. Therefore, while cash from the sale of a building is a taxable receipt, when viewed under the cash basis accounting, it can be perceived differently than routine income from services or interest, which are commonly classified as immediately taxable upon receipt.

Thus, the cash basis provides a specific perspective on timing and classification of income that can make the sale of physical assets stand