tax benefit rule
Legal Definition of tax benefit rule
: a tax rule requiring that if an amount (as of a loss) used as a deduction in a prior taxable year is recovered in a later year it must be included in the gross income for the later year to the extent of the original deduction
Additional Notes on tax benefit rule
If the amount of the loss was not taken as a deduction in the year the loss occurred, the recovered amount is not counted as income.
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