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Tax 503 > Vocabulary > Flashcards

Vocabulary Flashcards

1
Q

Ad Valorem Taxes

A

Based on value, property taxes on wealth or capital

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2
Q

Realty

A

Real property like real estate, or any fixtures 

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3
Q

Personalty

A

All property that is not attached to real estate and is movable

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4
Q

Exercise Tax

A

Tax on the manufactured sale or use of goods for the transfer of property

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5
Q

Sales tax

A

A state or local tax on retail sales

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6
Q

Use tax

A

A complement to sales tax. It is assessed at the same rate as the sales tax. It prevents avoidance of sales tax.

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7
Q

Severance Taxes

A

Transaction taxes based on the notion that the state has an interest in natural resources, example oil, coal gas, or iron

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8
Q

Estate Tax

A

The right to transfer property by death. Levied on the estate of the descendent

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9
Q

Inheritance tax

A

Right to receive property from a descendent. Levied on the person receiving the property

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10
Q

Gift tax

A

a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return

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11
Q

Employment taxes

A

Income, tax imposed on employers and employees

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12
Q

FICA Tax

A

Two components.
1) Social Security tax( old, age, survivors, and disability insurance)
2. Medicare.

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13
Q

FUTA tax

A

Provides funds the states can use to minister unemployment benefits

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14
Q

Franchise tax

A

State impose on corporations for the right to do business in the state

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15
Q

Occupational fees

A

Applies to various trade, some businesses, example, liquor, license, or a fee to practice a profession

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16
Q

Flat tax

A

Consumption tax. 9% flat rate on wages and pension benefits

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17
Q

National sales tax

A

Intended as a replacement for the current federal income tax

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18
Q

Value added tax (VAT)

A

Imposed on the value of each party in a production cycle. A system of credits that results in the vat only being paid by the final consumer

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19
Q

Carbon tax

A

Aims to help reduce carbon emissions

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20
Q

Financial transaction tax

A

Can be imposed on stock and bonds, and it restricts in trading

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21
Q

Correspondence audit

A

Oh, that’s done by mail

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22
Q

Office audit

A

Restricted and conducted in IRS offices

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23
Q

Field audit

A

Examination of items reported on returns and takes place at taxpayers locations

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24
Q

Statue of limitation

A

Any lawsuit can be brought within a reasonable period of time

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25
Q

Prepare tax identification pin

A

A required pen by all persons who are paid for preparing , or assisting in preparing federal tax returns

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26
Q

Revenue neutrality

A

Changes don’t increase or decrease the net revenues

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27
Q

Where withdrawal pay

A

Recognize is there any quality of taxing a transaction when taxpayers lack means

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28
Q

Indexation

A

Government adjusted income tax components to account for inflation

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29
Q

Proposed regulations

A

New regulations and changes to existing regulations are issued in repost forms before finalized. Section 2

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30
Q

Final regulations

A

Have force and effect of the law

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31
Q

Temporary regulations

A

Are temporary. Cited as temp.rE section.

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32
Q

Revenue rulings

A

Official pronouncements of IRS. Provide examples of how IRS would apply law to specific fact situation’s

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33
Q

Revenue procedure

A

Deals with internal management, practices, and procedures of IRS

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34
Q

Notices

A

Issued when immediate guidance is needed by taxpayers and tax practitioners

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35
Q

Letter rulings

A

Issue for a fee upon taxpayers request and describes how the IRS will treat a proposed transaction for tax purposes

36
Q

Determination letters

A

Issued at the request of taxpayers and provide guidance on the application of tax law

37
Q

Technical advice memoranda (TAMs)

A

Deals with completed transactions

38
Q

Court of original jurisdiction

A

Trial court. Initially, hears the case.

39
Q

US District Court/US quart of Federal claims /US tax court

A

Taxpayers choice of 3 courts

40
Q

Small cases, division

A

US tax court only hears cases $50,000 or less judges ruling is final

41
Q

Circuit court of appeals

A

Trial court can be appealed by this by the losing party

42
Q

Writ of Certiorari

A

Appeal to US Supreme Court. Grants to resolve conflict among courts of appeal.

43
Q

Itemize deductions

A

Personal expenditures allowed by the code as deductions adjusted gross income

44
Q

Asquiescence

A

“A” or “Acq”
IRS loses, but agrees with decisions

45
Q

Nonacquiescence

A

“NA” or “Nonacq”
IRS loses, but disagrees

46
Q

Tax research

A

Process of finding a component in a professional conclusion to a tax problem

47
Q

Standard deductions

A

Depends on filing status, age and blindness

48
Q

Personal independency exceptions

A

Tax law provides an exemption for each individual taxpayer an additional exemption for the taxpayer spouse if a joint return is file

49
Q

Qualifying child

A

An individual who satisfies the relationship abode and age tests

50
Q

Qualifying relative

A

An individual who satisfies the relationship, gross income, support, citizenship, and joint return test

51
Q

Multiple support agreement

A

Qualified for dependency exemption the support test must be satisfied. Requires over 50% of the support be provided by the taxpayer where no one person provides more than 50% of the support.

52
Q

Gross income

A

Income subjected to the federal income tax

53
Q

Recovery of capital doctrine

A

When a taxpayer exchange occurs, the seller may be permitted to recover his or her investment (or other adjusted basis) in the property before gain or loss is recognized

54
Q

Income

A

An increase in wealth that has been realized

55
Q

Economic income

A

The changes in the tax payers net worth, as measured in terms of market value of assets the taxpayer consume during the year (not use for tax purposes)

56
Q

Accounting income

A

Accountants concept of income, generally based upon the realization principal

57
Q

Taxable year

A

Annual. Over which income is measured for income tax purposes

58
Q

Cash receipts method

A

Method that reflects deductions as paid an income as received an any one cash year

59
Q

Accrual method

A

Recognize revenue in the period in which it’s earned and realizable, but not necessarily when the cash is actually received

60
Q

Claim of right doctrine

A

requires that all taxpayers pay tax on the earnings from which they benefit during the tax year.

61
Q

Hybrid method

A

Combination of a cruel and cash methods

62
Q

Constructive receipt

A

Income is unquantifiable available, but not physically in the taxpayer possession still subjected to income tax

63
Q

Original issue discount (OID)

A

The difference between issue, price of a debt application and the maturity value of the obligation when the issue price is less than the maturity value. It’s interest.

Redemption price - issuance price

64
Q

Fruit and tree metaphor

A

The courts have held that an individual who earned income from property or services cannot assign that income to another

65
Q

Assignment of income

A

A taxpayer attempt to avoid the recognition of income by assigning another the property that generates the income

66
Q

Majority interest partners

A

Partners to have more than 50% in partnership profits in capital. Counting in the same taxable year.

67
Q

Principal partner

A

A partner with a 5% or greater interest in partnership or profits

68
Q

Least Aggregated deferral method

A

An algorithm set forth in the regulations to determine the tax year, or a partnership, or a limited liability entity with owners, whose tax years differ.

the tax year of any partner that results in the least deferral of income when the profits interests and tax years of all partners are taken into account

69
Q

Personal service corporation (PSC)

A

A corporation who is principal activity is the performance of personal services, and where services are performed

70
Q

Short taxable year

A

Year, that is less than 12 months

71
Q

Crop insurance proceeds

A

Proceeds received when an insured cropped is destroyed.

72
Q

12 month rule for a prepaid expenses

A

Taxpayers to use the cash method are required to use the accrual method for deducting certain prepaid expenses

73
Q

Crop method

A

Method of accounting for agricultural crops that are planted in one year, but harvested in a subsequent year. Cost of raising the crops are cumulative as inventory, and are deducted when the income from the crop is realized.

74
Q

All events test

A

As apply to the recognition of income, this requires an income of an accrual basis, be recognized
1) all events have occurred that fix the taxpayers right to receive the income
2) the amount can be determined with reasonable accuracy

75
Q

Economic performance test

A

One requirement that must be satisfied for an accrual basis, taxpayer to deduct an expense

76
Q

Partnership

A

For income tax purposes a partnership includes a syndicate, group, pool or joint venture as well as ordinary partnerships

77
Q

S corporation

A

Designation for a corporation that elects to be taxed similarly to a partnership

78
Q

Community Property

A

Half of the earnings of each spouse earnings is considered on by the other spouse.

Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

79
Q

Alimony and separate maintenance payments

A

Alimony deduction result in the payment for legal obligation, arising from the termination of a marital relationship

80
Q

Alimony recapture

A

The amount of alimony that previously has been included in the gross income of the recipient and deducted by the payer is now deducted by the recipient and included in the gross income of the payer, as a result of front loading 

81
Q

Imputed interest

A

For certain long-term properties, that IRS can convert some of the gain from the sale into interest income, if the contract does not provide for a minimum rate of interest to be paid by the purchaser

Sections, 483 and 1274

82
Q

Annuity

A

Nudity I fix some of money, payable to a person as specified times for a specific period of time or for life

83
Q

Report a foreign bank and financial accounts (FBAR)

A

Form 114 must be filed by individuals in some businesses, if they have foreign banks brokerage or similar accounts were at any time during the county year the aggregate balance exceeds 10,000

84
Q

Net operating loss

A

To mitigate the effects of animal accounting. Concepts, section 172 allows taxpayers to use an excess loss of one year as a deductible for certain past or future years.

85
Q

Nontaxable exchange

A

Transaction in which realized gains or losses are not recognize

86
Q

Like – kind exchanges

A

Exchange of real property, how far productive use in a trade or business, or for investment for other investments are traits are businesses real property

Tax 503 (1 decks)

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