Chapter 3 (Fundamentals of Income Taxation)

Question 1

Income - Deductions

Answer 1

Taxable Income

Question 2

Taxable Income * Tax rate

Answer 2

Tax Liability

Question 3

This means the total amount of money and the fair market value of property, services, or other accretions to wealth received, but it does not include borrowed money or a return of invested dollars

Answer 3

Income

Question 4

These are income items that are not subject to income tax.

Answer 4

Exclusions

Question 5

This includes all income items that must be reported on the federal income tax return and that are subject to the federal income tax. It includes all income as broadly defined, less exclusions.

Answer 5

Gross income

Question 6

These are subtracted from gross income in arriving at taxable income.

Answer 6

Deductions

Question 7

Deductions for adjusted gross income

Answer 7

Above-the-line Deductions

Question 8

Deductions from adjusted gross income are

Answer 8

Below-the-line Deductions