What does recognized gain mean on the CPA exam?
Recognized gain. The part of realized gain that actually goes on the return this year. Realized is what economically happened; recognized is what the Code makes taxable now.
Defined against Sec. 1001(c).
Which CPA exam sections use recognized gain?
Recognized gain appears in the REG section of the CPA exam.
Related terms
- bargain purchase gain: The gain recognized when identifiable net assets acquired exceed what was paid.
- net capital gain: Net long-term capital gain minus net short-term capital loss.
- effective portion: The part of a cash flow hedge's gain or loss that actually offsets the hedged risk.
- capital gain net income: Capital gains minus capital losses for the year, long-term and short-term combined.
- retrospective review: Comparing last period's accounting estimates against what actually happened, to see whether management's judgments lean consistently in one direction.
- suitably designed: The controls, if they operated as described, would achieve the stated objective.