Term
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Definition
| income that taxpayers realize and recognize and report on their tax returns for the year |
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Term
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Definition
| income realized during the year, minus realized income that is either excluded from taxation or deferred until a subsequent year |
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Term
| except as otherwise provided in this subtitle, gross income means all income from whatever source derived |
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Definition
| general definition (all inclusive definition) of income (gross income) |
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Term
1) when receive an economic benefit
2) they realize the income
3) no tax provision allows them to exclude or defer the income from gross income for that year |
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Definition
| when to recognize gorss income |
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Term
| recieve economic benefit; realize the income; no tax provision allows them to exclude fr defer the income from the gross income for that year |
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Definition
| criterio to RECOGNIZE gross income |
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Term
| economic benefit; realization principle; recognition |
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Definition
| three requirements for recognizign gross income |
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Term
| must icnrease the taxpayer's assets from receiving the borrowed funds; mustnot be completely ofset by the liability the taxpayer isr equired to pay from borrowing the funds |
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Definition
| economic benefit principle |
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Term
| a taxpayer engages in a transaction with another party; transaction results in a measurable change in property rights |
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Definition
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Term
| when receiving a payment for property, taxpayers are allowed to reduce the sale proceeds by their unrecoevered investment in the property to determine the realized gain from the sale |
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Definition
| return of capital priciple |
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Term
| if refund is made for an expenditure deducted in a previous year, the refund is included in gross income to the extent that the prior deduction produced a tax benefit |
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Definition
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Term
| a taxpayer must realize and recognize income when it is actually or constructively recieved |
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Definition
| constructive receipt doctrine |
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Term
| whenthe income ahs been credited to the TP's account or when the income is undconditionally available to the TP, the TP is aware of the income's availability, and there are nor estrictions on the TP's control over the income |
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Definition
| when is constructive receipt deemed to occur? |
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Term
| assignment of income doctrine |
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Definition
| prevents taxpayers from arbitrarily transferring the taxation on their income to to thers |
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Term
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Definition
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Term
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Definition
| income generated by the efforts of the taxpayer |
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Term
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Definition
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Term
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Definition
| an investment that pays a strea of equal payments over time |
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Term
| tax law deems a portion of each annuity payment as a nontaxable return of capital and the remainder as gross income |
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Definition
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Term
| original investment/expected value of anuity = return of caital percentage |
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Definition
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Term
| loss is realized when the proceeds are less than the tax bassis in the property |
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Definition
| loss on property dispostion |
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Term
sales proceeds
less: selling expenses
= amount realized
less: basis (investment) in property sold
= gain/loss on sale |
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Definition
| formual for calculating gain orloss from sale of an asset |
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Term
economic benefit?
income realized?
income recognized? |
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Definition
| 3 basic questions when examining income |
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Term
arms length transaction WITH ANOTHER PARTY;
change in the FORM of the tp's property |
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Definition
| for a realization event to occur: |
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Term
| earned income, unearned income, other/imputed income |
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Definition
| 3 categories of income sources |
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Term
| interest income; dividends; rent/royalty income; annuities; property dispositions |
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Definition
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Term
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Definition
| Rent and Royalty related deductions: for or from AGI? |
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Term
| portion is interest income and portion is recovery of capital |
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Definition
| how is annuity payment income taxed? |
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Term
taxed on GAINS
deduct LOSSES |
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Definition
| how are property dispositions taxed? |
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Term
| income from flow thru entities (partnerships; s corps); alimony |
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Definition
| "other" sources of incmoe |
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Term
| deduct percentage of expenses as FOR AGI DEDUCTIONS |
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Definition
| how are expenses deducted for percentage ownership of flow thru entities? |
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Term
cash payment
written agreement
no other purpose
stop at death
not members of same household
NOT child support
NOT property settlements |
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Definition
| criteria for alimoney (7) |
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Term
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Definition
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Term
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Definition
| who gets a dedcution for alimony? |
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Term
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Definition
| what kind of a deduction is alimony? |
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Term
| ITEMIZED deduction (to extent of gambling winnigns) |
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Definition
| what kind of a deduction is gambling loss? |
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Term
| fully taxable; considered regular (replacement) income (if laid off not fired) |
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Definition
| how is unemployment income taxed? |
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Term
| bargain purchases from employer, expenses paid by others; below market loans |
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Definition
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Term
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Definition
| indirect economic benefits received by the tp |
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Term
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Definition
| sales to tp at below fair market value |
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Term
| taxable to extent purchase price is below employer's cost |
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Definition
| how are bargain purchases from employer to employee for goods taxed? |
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Term
| discount in excess off 20% is included in gross income (and taxable) |
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Definition
| how are bargain purchases from employer to employee for services taxed? |
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Term
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Definition
| occurs when the rate of interest charged on a laon between parties is below the current federal interest rate |
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Term
| municipal bond interest, employment related exclusions (fringe benefits); education related exclusions; gifts/inheritances; lifes insurance proceeds (lump sum); workers' compensations; personal injury pyaments; health care reimbursements; disabillity insurance payments (if PURCHASED byy tp) |
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Definition
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Term
| medical and dental health insurance premiums; life insurance premiums up to $50K of group term; de minimis benefits; retirement contributions |
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Definition
| employement related exclusions from income (fringe) |
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Term
| scholarships (disinterested generosity) used for required items; proceeds from investments in qualified education plans is used for qualified expenses |
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Definition
| education related exclusions from income |
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Term
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Definition
| how are punitive damages for personal injury payments taxed? |
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Term
| included in income and taxable |
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Definition
| how are disability insurance payemtns purchased by an employer taxed? |
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Term
| profit motivated; personal |
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Definition
| two types of economic activity |
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Term
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Definition
| personal activity expenses |
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Term
| trade/bsiness activity; investment activity |
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Definition
| two types of profit motivated activities |
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Term
| trade or business activity |
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Definition
| requires a high level of taxpayer involvement |
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Term
| always FOR AGI deductions |
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Definition
| how are trade or business activity expenses treated? |
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Term
directly to trade or business activities
indirectly to trade or business activities
directly to investment activities
subsidize specific activities |
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Definition
| 4 kinds of FOR AGI deductions |
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Term
| ordinary and necessary; reasonable amount |
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Definition
| two stipulations for trade or business expenses to be FOR AGI deductible |
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Term
trade/business expenses
expenses/losses from flow thru entities
loss from sale of business assets |
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Definition
| categories of deductions related directly to trade or business activities (and FOR AGI deductions) |
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Term
| rent and royalty expenses; losses from sale of capital assets |
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Definition
| categories of deductions related directly to investment activities (FOR AGI) |
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Term
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Definition
| maintenance on rental property would be what type of deduction |
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Term
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Definition
| Limit on FOR AGI deduction of net capital losses |
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Term
| moving expenses; health insurace premiums paid by self employed tps; penalty on early withdrawal of savings |
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Definition
| categories of deductions related indirectly to trade/business activities |
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Term
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Definition
| ceiling/limitation of cash and preoperty donatoins to chartities |
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Term
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Definition
| limitation of deductions for contributions of capital gain property to charity |
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Term
| business and investment activities |
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Definition
| motivated primarily by profit intent |
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Term
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Definition
| a sustained, continuous, high level of profit-seeking activity |
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Term
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Definition
| business deductions are claimed ______ |
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Term
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Definition
| rent and royalty expenses which are deductible_______ |
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Term
| state, local, and foreign income taxes, real estate taxes, and personal property taxes |
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Definition
| What types of taxes qualify to be deducted as itemized deductions |
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Term
| gasoline taxes, social security taxes, and vehicle registration fees (unless calculated in relation to value rather than weight) |
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Definition
| What sort of taxes don’t qualify for the deduction? (From agi) |
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