Fed. Tax Ch 3 - Computing The Tax

Question 1

What is the Tax Formula for Individuals?

Answer 1

Question 2

What does Income (Broadly Conceived) mean?

Answer 2

In the tax formula, “income” is broadly conceived and includes all of the tax- payer’s income, both taxable and nontaxable. Although it is essentially equivalent to gross receipts, it does not include a return of capital or receipt of borrowed funds.