AN INTRODUCTION TO TAXATION AND UNDERSTANDING THE FEDERAL TAX LAW DISCUSSION QUESTIONS 1. Some tax considerations Irene should investigate include the following: a. State and local income taxes. b. State and local sales taxes. c. State and local
Property Transactions: Determination of Gain or Loss
Amount realized A. Generally, sales proceeds B. Sales proceeds = sales price, less . . . 1. Selling expenses 2. Legal fees C. Sales proceeds increased by 1. Assumption of liability (or, "subj
Deductions and Losses: Certain Itemized Deductions
Medical expenses A. Expenditures for . . . 1. Diagnosis 2. Cure 3. Mitigation 4. Treatment 5. Prevention of disease . . . or . . . 6. For the purpose of affecting any structure or function of t
Chapter 9 Deductions: Employees and Self-EmployedRelated Expenses
Employee ("EE") vs. Self-employed ("IC") A. Employer ("ER") has the right B. To specify 1. End results 2. Means
What's the difference (from a tax standpoint)? A. ER 1. P/R tax 2. F
Depreciation, Cost Recovery, Amortization,and Depletion
Types of property A. Real estate ("Realty") B. Personal property ("Personalty") C. Personal use property
Cost recovery = depreciation
Cost recovery applies to A. Trade or business B. Invest
Deductions and Losses: Certain Business Expenses and Losses
My business is on the cash basis. I have a customer who owes me $1,000. He just claimed bankruptcy, and informed me that I won't get paid. Can I write-off the amount that he owes me?
Deductions and Losses: In General
Two types of deductions A. Deductions for AGI "deductions off the top" B. Deductions from AGI "itemized deductions"
See p. 6-4 List of deductions "off the top"
If not listed as a deduction "for" AGI then a deduc
Gross income: Exclusions
See p. 5-4; Exhibit 5.1
You are in the 35% tax bracket. You have a choice. You can either get a raise of $10,000 or your employer will provide you with $7,000 of medical insurance. Which do you prefer?
$10,000 raise x (
Gross Income: Concepts and Inclusions
Gross income A. All income from whatever source B. Except as otherwise provided C. Regardless of form Prizes on "The Price is Right" Stealing Relief from debt ("casino") Swiss bank account
Beth sold IBM stoc
Tax Determination: Personal and Dependency Exemptions
Tax Formula See p. 3-3; Figure 3.1
Gross income A. All income from whatever source B. Except as otherwise provided C. Regardless of form
Use of a company car for pleasure All expenses paid t
An Introduction to Taxation and Understanding the Federal Tax Law
Tax rates A. Progressive 1. Increasingly higher rates as the tax base increases 2. EG., income tax, estate tax B. Proportional 1. Constant rate 2. EG., sales tax
Property taxes ("