HR BLOCK (TKA EXAM PREP)
Questions and Verified Answers
100% Guarantee Pass
1. IRC
Answer: Internal Revenue Code
2. Standard Deduction
Answer: Set by statute. Included in calculating the Below-the-Line deductions (for Taxable Income).
Alternative is Itemized Deduction
3. Itemized Deduction
Answer: Sum of allowable deductions in calculating the Below-the-Line deductions (for Taxable Income).
Alternative is Standard Deduction
4. Tax Rate (Individuals) - Ordinary Income
Answer: 10% - 37%
5. Tax Rate (Individuals) - Net Gains / Qualified Dividends
Answer: 0% - 20% (sometimes) 20% - 28% (usually)
6. Alternative Minimum Tax Rate
, Answer: 26% - 28%
7. Capital Gains
Answer: Profit (or Loss) from the sale of property or investments (preferential tax rate compared to Ordinary
Income)
8. Adjusted Gross Income (AGI)
Answer: Gross Income - Deductions
9. Taxable Income
Answer: AGI - (Larger of Standard or Itemized Deduction)
10. Tentative Tax
Answer: Taxable Income (x) Tax Rate
11. Taxes Due (+) or Refund (-)
Answer: Tentative Tax - Credits
12. Refundable Tax Credit
Answer: Taxpayer can receive money through a refund
13. Nonrefundable Tax Credit
Answer: Tax is lowered to a possible $0. But no refund.
14. Title 26 (US. Code)
Answer: The statutory bas of all federal tax law.
, 15. Gross Income
Answer: "All income from whatever source derived"
16. Haig-Simons Definition of Income
Answer: Market Value of Rights Exercised in Consumption + Change in Property Rights over the Term.
Interpretation Total value of consumer expenditures + net change in savings (e.g., bank accounts, stocks and bonds, real
estate)
Alternative is Economic Benefit Definition.
17. Economic Benefit Definition of Income
Answer: Value of any economic benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
18. Imputed Income
Answer: *Not Income
Any services one performs for oneself or family / the value of property used that one owns
Questions and Verified Answers
100% Guarantee Pass
1. IRC
Answer: Internal Revenue Code
2. Standard Deduction
Answer: Set by statute. Included in calculating the Below-the-Line deductions (for Taxable Income).
Alternative is Itemized Deduction
3. Itemized Deduction
Answer: Sum of allowable deductions in calculating the Below-the-Line deductions (for Taxable Income).
Alternative is Standard Deduction
4. Tax Rate (Individuals) - Ordinary Income
Answer: 10% - 37%
5. Tax Rate (Individuals) - Net Gains / Qualified Dividends
Answer: 0% - 20% (sometimes) 20% - 28% (usually)
6. Alternative Minimum Tax Rate
, Answer: 26% - 28%
7. Capital Gains
Answer: Profit (or Loss) from the sale of property or investments (preferential tax rate compared to Ordinary
Income)
8. Adjusted Gross Income (AGI)
Answer: Gross Income - Deductions
9. Taxable Income
Answer: AGI - (Larger of Standard or Itemized Deduction)
10. Tentative Tax
Answer: Taxable Income (x) Tax Rate
11. Taxes Due (+) or Refund (-)
Answer: Tentative Tax - Credits
12. Refundable Tax Credit
Answer: Taxpayer can receive money through a refund
13. Nonrefundable Tax Credit
Answer: Tax is lowered to a possible $0. But no refund.
14. Title 26 (US. Code)
Answer: The statutory bas of all federal tax law.
, 15. Gross Income
Answer: "All income from whatever source derived"
16. Haig-Simons Definition of Income
Answer: Market Value of Rights Exercised in Consumption + Change in Property Rights over the Term.
Interpretation Total value of consumer expenditures + net change in savings (e.g., bank accounts, stocks and bonds, real
estate)
Alternative is Economic Benefit Definition.
17. Economic Benefit Definition of Income
Answer: Value of any economic benefit received by the taxpayer regardless of the form of that benefit.
Alternative is Haig-Simons Definition.
18. Imputed Income
Answer: *Not Income
Any services one performs for oneself or family / the value of property used that one owns
