WGU C237 TAXATION 2025/2026 QUESTIONS AND
ANSWERS GUARANTEE A+
✔✔LIFO - ✔✔An accounting method that values the cost of assets sold under the
assumption that assets are sold in the reverse order in which they are purchased. (Ch
9-19)
✔✔Like Kind Exchange - ✔✔A nontax or partially taxable trade of exchange of assets
that are similar or related in use. (Ch 11-24)
✔✔Local - ✔✔A type of tax imposed by cities, counties, school districts, etc.
(Predominantly sales and property taxes) (Ch 1-14)
✔✔Long Term Capital Gains or Losses - ✔✔Gains or losses from the sale of capital
assets held for more than 1 year. (Ch 7-2)
✔✔Marginal - ✔✔The tax rate that applies to the next additional increment of a
taxpayer's taxable income (or to deductions). (Ch 1-5)
✔✔Marriage Benefit - ✔✔The tax savings married couples receives when one spouse is
either not working or earns significantly less than the other spouse. (Ch 8-3)
✔✔Marriage Penalty - ✔✔The extra tax cost a married couple pays when both spouses
earn approximately the same amount of income. (Ch 8-3)
✔✔Married Filing Jointly - ✔✔A taxpayer may use this status if legally married and both
will file taxes together. (Ch 4-19)
✔✔Married Filing Separately - ✔✔A taxpayer may use this status if legally married but
do not file taxes together. (Ch 4-19)
✔✔Maximum 15 Percent Amount - ✔✔Threshold for a specific percentage rate to apply
to long-term capital gains. (Ch 7-2)
✔✔Maximum Zero Rate Amount - ✔✔Threshold for a null present rate to apply to long-
term capital gains. (Ch 7-2)
✔✔Medicare - ✔✔A type of tax intended to provide payments to qualifying individuals
for medical costs. (Ch 1-12)
✔✔Medicare Tax - ✔✔A tax that helps pay medical costs for qualifying individuals. (Ch
8-14)
, ✔✔Mid Month Convention - ✔✔A depreciation convention that allows owners of real
property to take one-half of a month's depreciation during the month when the property
was placed service and in the month it was disposed of. (Ch 10-2)
✔✔Mid Quarter Convention - ✔✔A depreciation convention for tangible personal
property that allows for one-half of a quarters worth of depreciation in the quarter of
purchase and in the quarter of disposition (Ch 10-2)
✔✔Minimum Tax Credit - ✔✔A credit available in certain situations for the alternative
minimum tax paid. (Ch 8-13)
✔✔Miscellaneous Itemized Deductions - ✔✔Deductions such as gambling losses,
casualty and theft looses on investment property, and the unrecovered cost of a life
annuity. (Ch 6-21)
✔✔Mixed Motive Expenditures - ✔✔Activities that involve a mixture of business and
personal objectives. (Ch 9-8)
✔✔Modified Accelerated Cost Recovery System (MACRS) - ✔✔The current tax
depreciation system for tangible, personal, and real property. (Ch 10-2)
✔✔Municipal Bond - ✔✔The common name for state and local government debt. (Ch 5-
21)
✔✔Net Capital Gain - ✔✔The excess of net long-term gains for the taxable year over
net short-term capital loss for such year. (Ch 7-2)
✔✔Net Earnings - ✔✔The amount of earnings subject to self-employment income
taxes. (Ch 15-3)
✔✔Net Earnings From Self Employment - ✔✔The amount of earnings subject to self-
employment income taxes. (Ch 8-16)
✔✔Net Investment Income Tax - ✔✔A 3.8% tax on the lesser of income made from
investments or the excess of modified adjusted gross income over $250,000 for married
joint filers and surviving spouses, $125,000 for married separate filers, and $200,000 for
other taxpayers. (Ch 8-5)
✔✔Net Long Term Capital Gain - ✔✔The excess of capital gains for the taxable year
over the capital losses for such year for investments held beyond 1 year. (Ch 7-2)
✔✔Net Long Term Capital Loss - ✔✔The excess of capital losses for the taxable year
over the capital gains for such year for investments held beyond 1 year. (Ch 7-2)
ANSWERS GUARANTEE A+
✔✔LIFO - ✔✔An accounting method that values the cost of assets sold under the
assumption that assets are sold in the reverse order in which they are purchased. (Ch
9-19)
✔✔Like Kind Exchange - ✔✔A nontax or partially taxable trade of exchange of assets
that are similar or related in use. (Ch 11-24)
✔✔Local - ✔✔A type of tax imposed by cities, counties, school districts, etc.
(Predominantly sales and property taxes) (Ch 1-14)
✔✔Long Term Capital Gains or Losses - ✔✔Gains or losses from the sale of capital
assets held for more than 1 year. (Ch 7-2)
✔✔Marginal - ✔✔The tax rate that applies to the next additional increment of a
taxpayer's taxable income (or to deductions). (Ch 1-5)
✔✔Marriage Benefit - ✔✔The tax savings married couples receives when one spouse is
either not working or earns significantly less than the other spouse. (Ch 8-3)
✔✔Marriage Penalty - ✔✔The extra tax cost a married couple pays when both spouses
earn approximately the same amount of income. (Ch 8-3)
✔✔Married Filing Jointly - ✔✔A taxpayer may use this status if legally married and both
will file taxes together. (Ch 4-19)
✔✔Married Filing Separately - ✔✔A taxpayer may use this status if legally married but
do not file taxes together. (Ch 4-19)
✔✔Maximum 15 Percent Amount - ✔✔Threshold for a specific percentage rate to apply
to long-term capital gains. (Ch 7-2)
✔✔Maximum Zero Rate Amount - ✔✔Threshold for a null present rate to apply to long-
term capital gains. (Ch 7-2)
✔✔Medicare - ✔✔A type of tax intended to provide payments to qualifying individuals
for medical costs. (Ch 1-12)
✔✔Medicare Tax - ✔✔A tax that helps pay medical costs for qualifying individuals. (Ch
8-14)
, ✔✔Mid Month Convention - ✔✔A depreciation convention that allows owners of real
property to take one-half of a month's depreciation during the month when the property
was placed service and in the month it was disposed of. (Ch 10-2)
✔✔Mid Quarter Convention - ✔✔A depreciation convention for tangible personal
property that allows for one-half of a quarters worth of depreciation in the quarter of
purchase and in the quarter of disposition (Ch 10-2)
✔✔Minimum Tax Credit - ✔✔A credit available in certain situations for the alternative
minimum tax paid. (Ch 8-13)
✔✔Miscellaneous Itemized Deductions - ✔✔Deductions such as gambling losses,
casualty and theft looses on investment property, and the unrecovered cost of a life
annuity. (Ch 6-21)
✔✔Mixed Motive Expenditures - ✔✔Activities that involve a mixture of business and
personal objectives. (Ch 9-8)
✔✔Modified Accelerated Cost Recovery System (MACRS) - ✔✔The current tax
depreciation system for tangible, personal, and real property. (Ch 10-2)
✔✔Municipal Bond - ✔✔The common name for state and local government debt. (Ch 5-
21)
✔✔Net Capital Gain - ✔✔The excess of net long-term gains for the taxable year over
net short-term capital loss for such year. (Ch 7-2)
✔✔Net Earnings - ✔✔The amount of earnings subject to self-employment income
taxes. (Ch 15-3)
✔✔Net Earnings From Self Employment - ✔✔The amount of earnings subject to self-
employment income taxes. (Ch 8-16)
✔✔Net Investment Income Tax - ✔✔A 3.8% tax on the lesser of income made from
investments or the excess of modified adjusted gross income over $250,000 for married
joint filers and surviving spouses, $125,000 for married separate filers, and $200,000 for
other taxpayers. (Ch 8-5)
✔✔Net Long Term Capital Gain - ✔✔The excess of capital gains for the taxable year
over the capital losses for such year for investments held beyond 1 year. (Ch 7-2)
✔✔Net Long Term Capital Loss - ✔✔The excess of capital losses for the taxable year
over the capital gains for such year for investments held beyond 1 year. (Ch 7-2)
