Final Exam for;
WGU - C237 - TAXATION 1
** Expert-Verified Explanation
** Questions with Verified Answer
** New Edition |Updated
** Guaranteed Pass
** 100% Correct Answers | Graded A+
,30 Number 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)
90 Number 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 Rule A 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 Assets Depreciable or real property used in a taxpayers trade or business owned for
more than one year. (Ch 11-8)
1231 Look Back Rule A tax rule requiring taxpayers to treat current year net (Ch 11-18)
1245 Property Tangible personal property and intangible property subject to cost recovery
deductions. (Ch 11-10)
1250 Property Real property subject to cost recovery deductions. (Ch 11-14)
291 Depreciation Recapture The portion of a corporate taxpayer's gain on real property that is converted from
1231 gain to ordinary income. (Ch 11-14)
481 Adjustment A change to taxable income associated with a change in accounting methods.
(Ch 9-30)
Abandoned Spouse A 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 Benefits Early 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 Plan An 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 Methods The 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 Period A fixed period of time win which a business reports income and deductions. (Ch
9-13)
Accrual Method A 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 Tax A tax assessed on corporations that retain earning without a business reason to
do so. (Ch 15-3)
, Acquiescence Issued 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 Decision An IRS pronouncement that explains the background reasoning behind an IRS
acquiescence or nonacquiescence . (Ch 2-17)
Ad Valorem A type of tax based on the value of property. (Ch 1-15)
Additional Medicare Tax A 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 Basis An 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 Income Gross 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 Return A taxpayer's before-tax rate of return on an investment minus the taxes paid on
the income from the investment. (Ch 3-3)
Alimony A support payment of cash made to a former spouse. (Ch 5-14)
All Events Test Requires 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 Income A concept that says: Gross income means all income from whatever source
derived. (Ch 4-2)
Allowance Method Method 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 Tax A 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 Adjustments Adjustments, either positive or negative, to regular taxable income to arrive at the
alternative minimum tax base. (Ch 8-9)
Alternative Minimum Tax System A 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 Base Alternative minimum taxable income minus the alternative minimum tax
exemption. (Ch 8-8)
Amortization The method of recovering the cost of intangible assets over a specific time
period. (Ch 10-1)
WGU - C237 - TAXATION 1
** Expert-Verified Explanation
** Questions with Verified Answer
** New Edition |Updated
** Guaranteed Pass
** 100% Correct Answers | Graded A+
,30 Number 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)
90 Number 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 Rule A 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 Assets Depreciable or real property used in a taxpayers trade or business owned for
more than one year. (Ch 11-8)
1231 Look Back Rule A tax rule requiring taxpayers to treat current year net (Ch 11-18)
1245 Property Tangible personal property and intangible property subject to cost recovery
deductions. (Ch 11-10)
1250 Property Real property subject to cost recovery deductions. (Ch 11-14)
291 Depreciation Recapture The portion of a corporate taxpayer's gain on real property that is converted from
1231 gain to ordinary income. (Ch 11-14)
481 Adjustment A change to taxable income associated with a change in accounting methods.
(Ch 9-30)
Abandoned Spouse A 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 Benefits Early 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 Plan An 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 Methods The 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 Period A fixed period of time win which a business reports income and deductions. (Ch
9-13)
Accrual Method A 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 Tax A tax assessed on corporations that retain earning without a business reason to
do so. (Ch 15-3)
, Acquiescence Issued 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 Decision An IRS pronouncement that explains the background reasoning behind an IRS
acquiescence or nonacquiescence . (Ch 2-17)
Ad Valorem A type of tax based on the value of property. (Ch 1-15)
Additional Medicare Tax A 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 Basis An 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 Income Gross 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 Return A taxpayer's before-tax rate of return on an investment minus the taxes paid on
the income from the investment. (Ch 3-3)
Alimony A support payment of cash made to a former spouse. (Ch 5-14)
All Events Test Requires 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 Income A concept that says: Gross income means all income from whatever source
derived. (Ch 4-2)
Allowance Method Method 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 Tax A 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 Adjustments Adjustments, either positive or negative, to regular taxable income to arrive at the
alternative minimum tax base. (Ch 8-9)
Alternative Minimum Tax System A 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 Base Alternative minimum taxable income minus the alternative minimum tax
exemption. (Ch 8-8)
Amortization The method of recovering the cost of intangible assets over a specific time
period. (Ch 10-1)
