ACC 561 Exam 1
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1. filing status your tax filing group based on marital status.
2. filing status rates married filing jointly= best rates.
married filing separately= worst rates.
qualifying spouse= treated as married filing jointly for 2
years after death.
head of household= second best rates.
3. why would you don't trust your partner, income disparity, etc. you can
file married filing choose to file jointly or separately year by year.
separately?
4. individual in- gross income
come tax formula <for AGI deductions>
= adjusted gross income (AGI)
<from AGI deductions: standard or itemized>
<deductions for qualified business income>
= taxable income
x tax rates
= income tax liability
+ other taxes
= total tax
<credits>
<prepayments>
= taxes due
5. taxable income the base for computing individual income tax due.
taxable income= AGI - from AGI deductions.
6. gross income generally includes ALL realized income from whatever
source derived.
7. gross income ex- excluded items are never taxable. permanently excluded
clusions from taxation.
ex: gifts and inheritances, alimony received, gain on sale
of personal residence, life insurance proceeds, interest
income from municipal bonds.
, ACC 561 Exam 1
Study online at https://quizlet.com/_duonym
8. gross income de- included in gross income a year later. deferred until a
ferrals subsequent year.
ex: installment sale, like-kind exchanges.
9. character of in- aka type of income. determines the rate at which income
come will be taxed.
ordinary, capital, qualified dividend.
10. ordinary income income/loss that is taxed at the ordinary rates, or offsets
income taxed at ordinary rates. not capital in character.
ex: compensation for services, business income, rents and
royalties, alimony received, retirement income.
11. capital income gains or losses on the disposition or sale of capital assets.
12. capital assets assets of a permanent nature used in the production of
income. ex: land, buildings, machinery, and equipment.
all assets other than:
(1) acc rec from sale of g/s,
(2) inventory and other assets held for sale in ordinary
business,
(3) assets used in trade or business (including supplies).
capital assets include nonbusiness assets: personal use
automobiles, personal residences, and assets held for
investment (stocks and bonds).
13. taxes for capital long term= taxpayer owned the asset more than 1 year.
gains/losses short term= taxpayer owned the asset less than a year
before selling.
14. taxes for capital (1) net the short terms.
gains/losses cal- (2) net the long terms.
culation (3) net the nets.
if net capital loss: we can deduct up to $3000 per year. net
Study online at https://quizlet.com/_duonym
1. filing status your tax filing group based on marital status.
2. filing status rates married filing jointly= best rates.
married filing separately= worst rates.
qualifying spouse= treated as married filing jointly for 2
years after death.
head of household= second best rates.
3. why would you don't trust your partner, income disparity, etc. you can
file married filing choose to file jointly or separately year by year.
separately?
4. individual in- gross income
come tax formula <for AGI deductions>
= adjusted gross income (AGI)
<from AGI deductions: standard or itemized>
<deductions for qualified business income>
= taxable income
x tax rates
= income tax liability
+ other taxes
= total tax
<credits>
<prepayments>
= taxes due
5. taxable income the base for computing individual income tax due.
taxable income= AGI - from AGI deductions.
6. gross income generally includes ALL realized income from whatever
source derived.
7. gross income ex- excluded items are never taxable. permanently excluded
clusions from taxation.
ex: gifts and inheritances, alimony received, gain on sale
of personal residence, life insurance proceeds, interest
income from municipal bonds.
, ACC 561 Exam 1
Study online at https://quizlet.com/_duonym
8. gross income de- included in gross income a year later. deferred until a
ferrals subsequent year.
ex: installment sale, like-kind exchanges.
9. character of in- aka type of income. determines the rate at which income
come will be taxed.
ordinary, capital, qualified dividend.
10. ordinary income income/loss that is taxed at the ordinary rates, or offsets
income taxed at ordinary rates. not capital in character.
ex: compensation for services, business income, rents and
royalties, alimony received, retirement income.
11. capital income gains or losses on the disposition or sale of capital assets.
12. capital assets assets of a permanent nature used in the production of
income. ex: land, buildings, machinery, and equipment.
all assets other than:
(1) acc rec from sale of g/s,
(2) inventory and other assets held for sale in ordinary
business,
(3) assets used in trade or business (including supplies).
capital assets include nonbusiness assets: personal use
automobiles, personal residences, and assets held for
investment (stocks and bonds).
13. taxes for capital long term= taxpayer owned the asset more than 1 year.
gains/losses short term= taxpayer owned the asset less than a year
before selling.
14. taxes for capital (1) net the short terms.
gains/losses cal- (2) net the long terms.
culation (3) net the nets.
if net capital loss: we can deduct up to $3000 per year. net
