(Top 2024/2025 EXAM REVIEW PAPER ) WGU - C237 - TAXATION 1, Questions and answers, rated A+, VERIFIED.

WGU - C237 - TAXATION 1, Questions and answers, rated A+, VERIFIED. Number of days that are initially given to an audited individual or business to either request a conference with an appeals officer or agree to the proposed adjustment. (Ch 2-6) - - 30 Number of days that are given to an audited individual or business after the appeals conference to either pay the proposed deficiency or file a petition in the US Tax Court to hear the case. (Ch 2-6) - -90 12 Month Rule - A regulation that allows prepaid business expenses to be currently deducted when the contract does not extend beyond a specific numbers of months and the contract period does not extend beyond the end of the tax year following the year of the payment. (Ch 6-15) - 12 Month Rule - Assets Depreciable or real property used in a taxpayers trade or business owned for more than one year. (Ch 11-8) - - 1231 -A tax rule requiring taxpayers to treat current year net (Ch 11-18) - 1231 Look Back Rule Tangible personal property and intangible property subject to cost recovery deductions. (Ch 11-10) - - 1245 Property - Real property subject to cost recovery deductions. (Ch 11-14) - 1250 Property The portion of a corporate taxpayer's gain on real property that is converted from 1231 gain to ordinary income. (Ch 11-14) - 291 Depreciation Recapture - A change to taxable income associated with a change in accounting methods. (Ch 9-30) - 481 Adjustment - Abandoned Spouse - -A married taxpayer who lives apart from the spouse for the last 6 months of the year, who files a tax return separate from the spouse, and who maintains a household for a qualifying child. (Ch 4-24) Accelerated Death Benefits - -Early receipt of life insurance proceeds that are not taxable un certain circumstances, such as the taxpayer is medically certified with an illness that is expected to cause death within 24 months. (Ch 5-28) Accountable Plan - -An Employer's reimbursement plan under which employees must submit documentation supporting expenses to receive reimbursement and reimbursements are limited to legitimate business expenses. (Ch 5-23) Accounting Methods - -The procedure for determining the taxable year in which a business recognizes a particular item of income or deduction, thereby dictating the timing of when a taxpayer reports income and deductions. (Ch 9-14) Accounting Period - -A fixed period of time win which a business reports income and deductions. (Ch 9-13) Accrual Method - -A method of accounting that generally recognizes income in the period earned and recognizes deductions in the period that liabilities are incurred. (Ch 5-6) Accumulated Earnings Tax - -A tax assessed on corporations that retain earning without a business reason to do so. (Ch 15-3) Acquiescence - -Issued after the IRS loses a trial-level or circuit court case where the IRS doesn't necessarily agree with the court's ruling, but chooses to no longer litigate the issue. (Ch 2-17) Action on Decision - -An IRS pronouncement that explains the background reasoning behind an IRS acquiescence or nonacquiescence . (Ch 2-17) Ad Valorem - -A type of tax based on the value of property. (Ch 1-15) Additional Medicare Tax - -A tax imposed at a rate of .9% for salary or wages or net self-employment earning in excess of $200,000. (Ch 8-14) Adjusted Basis - -An asset's carrying value for tax purposes at a given point in time, measured as the initial basis plus capital improvements less depreciation or amortization. (Ch 10-1,11-5) Adjusted Gross Income - -Gross income less specific "above the line" deductions. It is an important reference point in the income tax formula. (Ch 4-2) After Tax Rate of Return - -A taxpayer's before-tax rate of return on an investment minus the taxes paid on the income from the investment. (Ch 3-3) Alimony - -A support payment of cash made to a former spouse. (Ch 5-14) All Events Test - -Requires that income or expenses are recognized when all events have occurred that determine or fix the right to receive the income or liability to make the payments and the amount of the income or expense can be determined with reasonable accuracy. (Ch 9-21) All Inclusive Income - -A concept that says: Gross income means all income from whatever source derived. (Ch 4-2) Allowance Method - -Method used for financial reporting purposes; under this method, bad debt expense is based on an estimate of the amount of the bad debts in AR at YE. (Ch 9-25) Alternative Minimum Tax - -A tax that is designed to require taxpayers to pay some specific level of tax even when they have low or no regular taxable income as a result of certain tax breaks in the tax code. (Ch 4-11) Alternative Minimum Tax Adjustments - -Adjustments, either positive or negative, to regular taxable income to arrive at the alternative minimum tax base. (Ch 8-9) Alternative Minimum Tax System - -A system that was designed to ensure that taxpayers generating economic income pay some minimum amount of income tax each year. (Ch 8-8) Alternative Minimum Tax Base - -Alternative minimum taxable income minus the alternative minimum tax exemption. (Ch 8-8) Amortization - -The method of recovering the cost of intangible assets over a specific time period. (Ch 10-1) Amount Realized - -The value of everything received by the seller in a transaction less selling costs. (Ch 11-2) Analyze Tax Authorities - -Step 4 of tax research. (Ch 2-18