WGU - C237 - TAXATION 1

WGU - C237 - TAXATION 1

11 studiers today 5.0 (3 reviews) Students also studied Terms in this set (292) Western Governors UniversityD 072 Save WGU D217 Accounting Information ...163 terms kristineburrow Preview Test Prep - WGU - Principles of Man...105 terms C_BondePreview D217 Accounting Information Syste...226 terms vanessa_harris263 Preview Operat 245 term rwd 30Number of days that are initially given to an audited individual or business to either request a conference with an appeals officer or agree to the proposed adjustment. (Ch 2-6) 90Number of days that are given to an audited individual or business after the appeals conference to either pay the proposed deficiency or file a petition in the US Tax Court to hear the case. (Ch 2-6) 12 Month RuleA regulation that allows prepaid business expenses to be currently deducted when the contract does not extend beyond a specific numbers of months and the contract period does not extend beyond the end of the tax year following the year of the payment. (Ch 6-15) 1231 AssetsDepreciable or real property used in a taxpayers trade or business owned for more than one year. (Ch 11-8) 1231 Look Back RuleA tax rule requiring taxpayers to treat current year net (Ch 11-18) 1245 PropertyTangible personal property and intangible property subject to cost recovery deductions. (Ch 11-10) 1250 PropertyReal property subject to cost recovery deductions. (Ch 11-14) 291 Depreciation RecaptureThe portion of a corporate taxpayer's gain on real property that is converted from 1231 gain to ordinary income. (Ch 11-14) 481 AdjustmentA change to taxable income associated with a change in accounting methods. (Ch 9-30)

Abandoned SpouseA married taxpayer who lives apart from the spouse for the last 6 months of the year, who files a tax return separate from the spouse, and who maintains a household for a qualifying child. (Ch 4-24) Accelerated Death BenefitsEarly receipt of life insurance proceeds that are not taxable un certain circumstances, such as the taxpayer is medically certified with an illness that is expected to cause death within 24 months. (Ch 5-28) Accountable PlanAn Employer's reimbursement plan under which employees must submit documentation supporting expenses to receive reimbursement and reimbursements are limited to legitimate business expenses. (Ch 5-23) Accounting MethodsThe procedure for determining the taxable year in which a business recognizes a particular item of income or deduction, thereby dictating the timing of when a taxpayer reports income and deductions. (Ch 9-14) Accounting PeriodA fixed period of time win which a business reports income and deductions. (Ch 9-13) Accrual MethodA method of accounting that generally recognizes income in the period earned and recognizes deductions in the period that liabilities are incurred. (Ch 5-6) Accumulated Earnings TaxA tax assessed on corporations that retain earning without a business reason to do so. (Ch 15-3) AcquiescenceIssued after the IRS loses a trial-level or circuit court case where the IRS doesn't necessarily agree with the court's ruling, but chooses to no longer litigate the issue. (Ch 2-17) Action on DecisionAn IRS pronouncement that explains the background reasoning behind an IRS acquiescence or nonacquiescence . (Ch 2-17) Ad ValoremA type of tax based on the value of property. (Ch 1-15) Additional Medicare TaxA tax imposed at a rate of .9% for salary or wages or net self-employment earning in excess of $200,000. (Ch 8-14) Adjusted BasisAn asset's carrying value for tax purposes at a given point in time, measured as the initial basis plus capital improvements less depreciation or amortization. (Ch

10-1,11-5)

Adjusted Gross IncomeGross income less specific "above the line" deductions. It is an important reference point in the income tax formula. (Ch 4-2) After Tax Rate of ReturnA taxpayer's before-tax rate of return on an investment minus the taxes paid on the income from the investment. (Ch 3-3) AlimonyA support payment of cash made to a former spouse. (Ch 5-14)

All Events TestRequires that income or expenses are recognized when all events have occurred that determine or fix the right to receive the income or liability to make the payments and the amount of the income or expense can be determined with reasonable accuracy. (Ch 9-21) All Inclusive IncomeA concept that says: Gross income means all income from whatever source derived. (Ch 4-2) Allowance MethodMethod used for financial reporting purposes; under this method, bad debt expense is based on an estimate of the amount of the bad debts in AR at YE. (Ch 9-25) Alternative Minimum TaxA tax that is designed to require taxpayers to pay some specific level of tax even when they have low or no regular taxable income as a result of certain tax breaks in the tax code. (Ch 4-11) Alternative Minimum Tax AdjustmentsAdjustments, either positive or negative, to regular taxable income to arrive at the alternative minimum tax base. (Ch 8-9) Alternative Minimum Tax SystemA system that was designed to ensure that taxpayers generating economic income pay some minimum amount of income tax each year. (Ch 8-8) Alternative Minimum Tax BaseAlternative minimum taxable income minus the alternative minimum tax exemption. (Ch 8-8) AmortizationThe method of recovering the cost of intangible assets over a specific time period. (Ch 10-1) Amount RealizedThe value of everything received by the seller in a transaction less selling costs.(Ch 11-2) Analyze Tax AuthoritiesStep 4 of tax research. (Ch 2-18) AnnuityA stream of equal payments over time. (Ch 5-11) AnnotatedA type of tax service arranged by code section where many types of relevant supporting documents may be found. (Ch 2-18) Arms LengthA type of transaction among unrelated taxpayers in which each transacting party negotiates for his or her own benefit. (Ch 3-12) Arms Length AmountPrice in transactions among unrelated taxpayers, where each transacting party negotiates for his or her own benefit. (Ch 9-4) Assignment of Income DoctrineA judicial doctrine in which earned income is taxed to the taxpayer providing the service, and that income from property is taxed to the individual who owns the property when the income accrues. (Ch 3-12, 5-8) Average Tax RateThe tax rate that applies to the taxpayer's average level of taxation on each dollar of taxable income. (Ch 1-7)

Barter ClubsOrganizations that facilitate the exchange of rights to goods and services between members. (Ch 5-4) Before Tax Rate of ReturnA taxpayer's rate of return on an investment before paying taxes on the income from the investment. (Ch 3-16) BootProperty given or received in an otherwise nontaxable transaction such as a like- kind exchange that may trigger gain to a party to the transaction. An expression describing additional property a party to an exchange might throw in "to boot" to equalize the exchange. (Ch 11-26) BracketA subset or portion of the tax base subject to a specific tax rate. (Ch 1-5) Bunching Itemized DeductionsA common planning strategy in which a taxpayer pays two years worth of itemized expenses in one year to exceed the standard deduction in that year. (Ch 6-25) Business ActivityA profit-motivated activity that requires a relatively high level of involvement or effort from the taxpayer to generate income. (Ch 6-2) Business PurposeA type of judicial doctrine in which the IRS is allowed to challenge and disallow business expenses for transactions with no underlying business motivation. (Ch 3- 18) Business Tax CreditsNonrefundable credits designed to provide incentives for taxpayers to hire certain types of individuals or to participate in certain business activities. (Ch 8-31) Capital AssetsIn general, an asset other than an asset used in a trade or business or an asset such as an account or not receivable acquired in a business from the sale of services or property (Ch 7-2) Capital Gain PropertyAny asset that would have generated a long-term capital gain if the taxpayer had sold the property for it fair market value. (Ch 6-17) Cash MethodThe method of accounting that recognizes income in the period in which cash, property;, or services are received and recognizes deductions in the period paid.(Ch 5-6) Casualty LossesA loss that can result from the damage, destruction, or loss of your property from any sudden, unexpected, or unusual event such as a flood, hurricane, tornado, fire, earthquake, or volcanic eruption. (Ch 9-12) CeilingA limitation that is the maximum amount for adjustments to taxable income (or credits). (Ch 6-18) CertaintyRefers to the ability of taxpayers to determine when, where, and how much tax to pay. (Ch 1-22) Character of IncomeIncludes ordinary, capital, and qualified dividend. (Ch 4-6)