Tax Accounting Chapter 1-10 2023 Study Tests Package Deal

Tax Accounting - Chapter 2 Test Ability to pay concept - The tax levied on a taxpayer should be based on the amt that the taxpayer can afford to pay. What are the General Accounting Concepts? - Ability to pay, administrative convenience, arm's length transaction, and pay as you go Administ...

What is the broad definition of gross income? - All income from whatever source derived, unless excluded by law. Includes income realized in any form, whether in money, property, or services Taxpayers must received ______ to have gross income? - Economic benefit - receive an item of value What...

During the year, Addison is involved in the following transactions. What are the possible Federal income tax effects of these transactions? 1. Lost money gambling on a trip to a casino. 2. Helped pay for her neighbor Howie's dental bills. Howie is a good friend who is unemployed. 3. Received fr...

Which of the following choices is NOT a form of a tax prepayment? A. An overpayment of taxes in the prior year that was applied as an estimated payment for the current year. B. Income tax withheld from a taxpayer's salary or wages by an employer C. Estimated tax payments the taxpayer made direct...

What sources of income is included in business income? - Gross profit from inventory sales, income from services provided to customers, and income from renting property If a taxpayer's "business" activity doesn't meet the for-profit requirement, how is it treated? - As a hobby and expenses ar...

1. Investment Overview: •Before-tax rate of return on investment • After-tax rate of return on investment • Depends on when investment income is taxed -Relates to timing tax planning strategy -Depends on the rate at which the income is taxed -Relates to the conversion tax planning strateg...

Three categories of deductions for AGI? - 1. Directly related to business activities 2. Indirectly related to business activities 3. Deductions subsidizing specific activities DIRECTLY Related to Business Activities? - Taxpayers are allowed to deduct expenses incurred to generate business incom...

Progressive tax structure - the tax rate increases as the tax base increases Proportional tax structure - the tax rate remains the same regardless of the tax base Regressive tax structure - the tax rate decreases as the tax base increases Marginal tax rate - the proportion of tax paid on th...

Cost Recovery - common term used to describe the process by which businesses allocate the cost of their fixed assets over the time period in which the assets are used. Cost Basis - businesses may begin using the asset in their business (cost basis) once they begin using the asset in their busines...

Emily purchased a building to store inventory for her business. The purchase price was $760,000. Emily also paid legal fees of $300 to acquire the building. In March, Emily incurred $2,000 to repair minor leaks in the roof (from storm damage earlier in the month) and $5,000 to make the interior suit...