2b - Gross Income Exclusions

2b - Gross Income Exclusions - FederalIndividualIncomeTax...

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Federal Individual Income Tax  Online Lecture Series Gross Income Exclusions Presented by Akore Berliner, CPA
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Taxable Income Formula Income  $x,xxx Less: Exclusions          (x,xxx) Gross Income $x,xxx Less: Deductions  for  AGI          (x,xxx) Adjusted Gross Income (AGI) $x,xxx Less: The greater of- Total itemized deductions or the standard deduction            (x,xxx) (x,xxx) Taxable Income $x,xxx
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What is Gross Income? Includes  ALL income from whatever source  derived, unless specifically  excluded  under  the Code
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Exclusions Defined Exclusions are: Items of income that are  specifically  designated  as not included in gross income Non-taxable income
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Common Gross Income Exclusions
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Gifts Gifts are excluded from the income of the donee  (recipient ) Transfer must be voluntary without adequate  consideration, and Made out of affection, respect, admiration, charity, or  donative intent  Gifting doesn’t always trigger tax to donor Might trigger a tax return, but not necessarily a tax bill Transfers by employers to employees do not qualify as  excludible gifts May be excludible under other provisions, e.g.,  employee achievement awards
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Inheritances  Inheritances are  nontaxable  to beneficiary Income earned on gifts or inheritances is  taxable under normal rules
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Life Insurance Proceeds  Exempt income  to beneficiary if paid solely due to death  of insured If owner of life insurance policy  cancels the policy  and  receives the cash surrender value Gain  must be recognized to extent amount received 
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This note was uploaded on 02/01/2012 for the course ACC 2546 taught by Professor Dean during the Summer '10 term at San Diego State.

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2b - Gross Income Exclusions - FederalIndividualIncomeTax...

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