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Chapter 3 Exhibits
Federal Tax Formula
TAX RATE STRUCTURES: To have a complete appreciation of the United States Tax system, it is important
to understand the various tax rate structures. There are three basic types of tax rate structures that we will
discuss in this unit. They are as follows:
Several years ago, in 1998, Mark McGwire hit his 60th homerun of the season.
Running up to this record setting event, the publicity was enormous and the
Internal Revenue Service made a series of announcements about the proper
taxation of the ind
CHAPTER 13 - ACCOUNTING
CHAPTER 13: TAX ACCOUNTING
I/ Taxable income and Tax liability for various entities:
1/ Computation of Taxable income:
Income Broadly Conceived
Less: Deductions for Adjusted Gross
CHAP 7: DEDUCTIONS: BUSINESS/INVESTERMENT
LOSSES AND PASSIVE ACTIVITY LOSSES
I/ Abusive tax shelters:
Tax shelters provided deductions to investors in order to reduce tax liabilities
with respect to income from other sources.
Almost all tax shelters wer
CHAPTER 6: DEDUCTIONS: GENERAL CONCEPTS AND TRADE
OR BUSINESS DEDUCTIONS
1/ Classification of deductions:
Trade or business deductions are generally deductible FOR AGI.
Deductions incurred for the production of income are generally deductible
FROM AGI a
CHAPTER 8 RESUME
DEDUCTIONS: ITEMIZED DEDUCTIONS
I/ Medical Expenses:
1/ Requirements for the deduction:
Medical expenses in excess of 10% of AGI (7.5% through 2016 if 65 or over)
are allowed as an itemized deduction.
The deduction is allowed only for m
CHAPTER 9: TAX CREDITS, PREPAYMENTS, AND AMT
A tax credit is a direct reduction of the tax due. It differs from a deduction,
which is a reduction of income subject to tax. A tax credit is more valuable than
a deduction of the same
CHAPTER 10: PROPERTY TRANSACTIONS: DETERMINATION
OF BASIS AND GAINS AND LOSSES
I/ Factors in determining gain or loss:
1/ General rule for any type of disposition
Realized gain or loss is the difference between the amount realized from the sale
RESUME CHAPTER 5: EXHIBITS
1/ Social Security Benefits:
A portion of Social Security income is taxable to the extent that a taxpayers
provisional income exceeds certain base amounts.
Provisional income = adjusted gross income + of Social Security received
CHAPTER 12: PROPERTY TRANSACTIONS: TREATMENT
OF CAPITAL AND SECTION 1231 ASSETS
I/ Special rules and limitations on transactions:
Capital Assets definition:
Code Sec. 1221 defines capital assets by stating what they are not.
Capital assets gen
CHAPTER 11: PROPERTY TRANSACTIONS:
NONRECOGNITION OF GAINS AND LOSSES
I/ Sale of a personal residence:
1/ Sale of a principal residence:
Amount and tax effect of the exclusion:
$250,000 (Married individuals filing jointly may exclude up to $50
Select the best answer for each of the following items.
Award: 0 out of 0.76 points
a. Which of the following best describes the relationship between assurance services and attest services?
While attest services involve na