(Summary) WGU - C237 - TAXATION 1, With
Complete Verified Solution 2024, Updated.
30
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)
90
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)
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)
1231 Assets
Depreciable or real property used in a taxpayers trade or business owned for more than
one year. (Ch 11-8)
1231 Look Back Rule
A tax rule requiring taxpayers to treat current year net (Ch 11-18)
1245 Property
Tangible personal property and intangible property subject to cost recovery deductions.
(Ch 11-10)
1250 Property
Real property subject to cost recovery deductions. (Ch 11-14)
291 Depreciation Recapture
The portion of a corporate taxpayer's gain on real property that is converted from 1231
gain to ordinary income. (Ch 11-14)
481 Adjustment
A change to taxable income associated with a change in accounting methods. (Ch 9-30)
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)
Annuity
A stream of equal payments over time. (Ch 5-11)
Annotated
A type of tax service arranged by code section where many types of relevant supporting
documents may be found. (Ch 2-18)
Arms Length
A type of transaction among unrelated taxpayers in which each transacting party
negotiates for his or her own benefit. (Ch 3-12)
Arms Length Amount
Price in transactions among unrelated taxpayers, where each transacting party
negotiates for his or her own benefit. (Ch 9-4)
Assignment of Income Doctrine
A judicial doctrine in which earned income is taxed to the taxpayer providing the service,
and that income from property is taxed to the individual who owns the property when the
income accrues. (Ch 3-12, 5-8)
Average Tax Rate
The tax rate that applies to the taxpayer's average level of taxation on each dollar of
taxable income. (Ch 1-7)
Barter Clubs
Organizations that facilitate the exchange of rights to goods and services between
members. (Ch 5-4)
Before Tax Rate of Return
A taxpayer's rate of return on an investment before paying taxes on the income from the
investment. (Ch 3-16)
Boot
Complete Verified Solution 2024, Updated.
30
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)
90
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)
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)
1231 Assets
Depreciable or real property used in a taxpayers trade or business owned for more than
one year. (Ch 11-8)
1231 Look Back Rule
A tax rule requiring taxpayers to treat current year net (Ch 11-18)
1245 Property
Tangible personal property and intangible property subject to cost recovery deductions.
(Ch 11-10)
1250 Property
Real property subject to cost recovery deductions. (Ch 11-14)
291 Depreciation Recapture
The portion of a corporate taxpayer's gain on real property that is converted from 1231
gain to ordinary income. (Ch 11-14)
481 Adjustment
A change to taxable income associated with a change in accounting methods. (Ch 9-30)
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)
Annuity
A stream of equal payments over time. (Ch 5-11)
Annotated
A type of tax service arranged by code section where many types of relevant supporting
documents may be found. (Ch 2-18)
Arms Length
A type of transaction among unrelated taxpayers in which each transacting party
negotiates for his or her own benefit. (Ch 3-12)
Arms Length Amount
Price in transactions among unrelated taxpayers, where each transacting party
negotiates for his or her own benefit. (Ch 9-4)
Assignment of Income Doctrine
A judicial doctrine in which earned income is taxed to the taxpayer providing the service,
and that income from property is taxed to the individual who owns the property when the
income accrues. (Ch 3-12, 5-8)
Average Tax Rate
The tax rate that applies to the taxpayer's average level of taxation on each dollar of
taxable income. (Ch 1-7)
Barter Clubs
Organizations that facilitate the exchange of rights to goods and services between
members. (Ch 5-4)
Before Tax Rate of Return
A taxpayer's rate of return on an investment before paying taxes on the income from the
investment. (Ch 3-16)
Boot
