ACC250 Chapter 6 Flashcards

1
Q

An employer’s reimbursement plan under which employees must submit documentation supporting expenses to receive reimbursement and reimbursements are limited to legitimate business expenses.

A

ACCOUNTING PLAN

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2
Q

A common planning strategy in which a taxpayer pays two year’s worth of itemized expenses in one year to exceed the standard deduction in that year.

A

BUNCHING ITEMIZED DEDUCTIONS

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3
Q

A profit-motivated activity that requires a relatively high level of involvement or effort from the taxpayer to generate income.

A

BUSINESS ACTIVITIES

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4
Q

Any asset that would have generated a long-term capital gain if the taxpayer had sold the property for its fair market value.

A

CAPITAL GAIN PROPERTY

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5
Q

A loss arising from a sudden, unexpected, or unusual event such as a fire, storm, shipwreck or loss from theft.

A

CASUALTY LOSS

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6
Q

Limitations that are maximum amounts for adjustments to taxable income (or credits). The amounts in excess of the ceiling are either lost or carried to another tax year.

A

CEILING

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7
Q

Traveling from a personal residence to the place of business.

A

COMMUTING

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8
Q

A fixed deduction allowed for each individual who qualifies as a “dependent” of the taxpayer.

A

DEPENDENCY EXEMPTION

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9
Q

A fixed income tax deduction a taxpayer may claim for each person who qualifies as a dependent of the taxpayer. This includes the taxpayer (and spouse on a joint return) who does not qualify as a dependent of another.

A

EXEMPTION

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10
Q

A minimum amount that an expenditure (or credit or other adjustment to taxable income) must meet before any amount is allowed.

A

FLOOR LIMITATION

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11
Q

A revenue-generating activity that is motivated by personal motives rather than profit objectives.

A

HOBBY

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12
Q

A profit-seeking activity that is intermittent or occasional in frequency including the production or collection of income or the management, conservation, or maintenance of property held for the production of income.

A

INVESTMENT ACTIVITIES

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13
Q

Deductions representing the sum of certain itemized deductions, such as reimbursed employee business expenses, investment expenses, and tax preparation fees, that are subject to a special floor limitation.

A

MISCELLANEOUS ITEMIZED DEDUCTIONS

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14
Q

Interpreted as an expense that is normal or appropriate and that is helpful or conducive to the business activity.

A

ORDINARY AND NECESSARY

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15
Q

Property that if sold would generate income taxed at ordinary rates.

A

ORDINARY INCOME PROPERTY

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16
Q

A fixed deduction allowed for an individual taxpayer, and spouse if filing a joint tax return.

A

PERSONAL EXEMPTION

17
Q

Privately sponsored foundations that disburse funds to other charities.

A

PRIVATE NONOPERATING FOUNDATIONS

18
Q

Privately sponsored foundations that actually fund and conduct charitable activities.

A

PRIVATE OPERATING FOUNDATIONS

19
Q

Consist of tuition and related costs for enrolling the taxpayer, spouse, or a dependent at a post-secondary institution of higher education.

A

QUALIFIED EDUCATION EXPENSES

20
Q

Loans whose proceeds are used to pay qualified education expenses.

A

QUALIFIED EDUCATIONAL LOANS

21
Q

A fixed deduction offered in lieu of itemized deductions. The amount of the standard deduction depends on the taxpayer’s filing status.

A

STANDARD DEDUCTION

22
Q

A profit-motivated activity characterized by a sustained, continuous, high level of individual involvement or effort.

A

TRADE OR BUSINESS