HR BLOCK (TKA EXAM PREP) QUESTIONS AND ANSWERS LATEST
UPDATE ALREADY GRADED A+
IRC - (ANSWER)Internal Revenue Code
Standard Deduction - (ANSWER)Set by statute. Included in calculating the Below-the-Line deductions (for
Taxable Income). Alternative is Itemized Deduction
Itemized Deduction - (ANSWER)Sum of allowable deductions in calculating the Below-the-Line
deductions (for Taxable Income). Alternative is Standard Deduction
Tax Rate (Individuals) - Ordinary Income - (ANSWER)10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends - (ANSWER)0% - 20% (sometimes) 20% - 28%
(usually)
Alternative Minimum Tax Rate - (ANSWER)26% - 28%
Capital Gains - (ANSWER)Profit (or Loss) from the sale of property or investments (preferential tax rate
compared to Ordinary Income)
Adjusted Gross Income (AGI) - (ANSWER)Gross Income - Deductions
Taxable Income - (ANSWER)AGI - (Larger of Standard or Itemized Deduction)
Tentative Tax - (ANSWER)Taxable Income (x) Tax Rate
Taxes Due (+) or Refund (-) - (ANSWER)Tentative Tax - Credits
Refundable Tax Credit - (ANSWER)Taxpayer can receive money through a refund
, HR BLOCK (TKA EXAM PREP) QUESTIONS AND ANSWERS LATEST
UPDATE ALREADY GRADED A+
Nonrefundable Tax Credit - (ANSWER)Tax is lowered to a possible $0. But no refund.
Title 26 (US. Code) - (ANSWER)The statutory bas of all federal tax law.
Gross Income - (ANSWER)"All income from whatever source derived"
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.
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.
Imputed Income - (ANSWER)*Not Income
Any services one performs for oneself or family / the value of property used that one owns
Loans - (ANSWER)Loans themselves are not taxed.
However, Loan Discharge or Loan Forgiveness may constitute Income.
- Debt must be enforceable.
- Creditor has agreed to receive less than initially contracted
UPDATE ALREADY GRADED A+
IRC - (ANSWER)Internal Revenue Code
Standard Deduction - (ANSWER)Set by statute. Included in calculating the Below-the-Line deductions (for
Taxable Income). Alternative is Itemized Deduction
Itemized Deduction - (ANSWER)Sum of allowable deductions in calculating the Below-the-Line
deductions (for Taxable Income). Alternative is Standard Deduction
Tax Rate (Individuals) - Ordinary Income - (ANSWER)10% - 37%
Tax Rate (Individuals) - Net Gains / Qualified Dividends - (ANSWER)0% - 20% (sometimes) 20% - 28%
(usually)
Alternative Minimum Tax Rate - (ANSWER)26% - 28%
Capital Gains - (ANSWER)Profit (or Loss) from the sale of property or investments (preferential tax rate
compared to Ordinary Income)
Adjusted Gross Income (AGI) - (ANSWER)Gross Income - Deductions
Taxable Income - (ANSWER)AGI - (Larger of Standard or Itemized Deduction)
Tentative Tax - (ANSWER)Taxable Income (x) Tax Rate
Taxes Due (+) or Refund (-) - (ANSWER)Tentative Tax - Credits
Refundable Tax Credit - (ANSWER)Taxpayer can receive money through a refund
, HR BLOCK (TKA EXAM PREP) QUESTIONS AND ANSWERS LATEST
UPDATE ALREADY GRADED A+
Nonrefundable Tax Credit - (ANSWER)Tax is lowered to a possible $0. But no refund.
Title 26 (US. Code) - (ANSWER)The statutory bas of all federal tax law.
Gross Income - (ANSWER)"All income from whatever source derived"
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.
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.
Imputed Income - (ANSWER)*Not Income
Any services one performs for oneself or family / the value of property used that one owns
Loans - (ANSWER)Loans themselves are not taxed.
However, Loan Discharge or Loan Forgiveness may constitute Income.
- Debt must be enforceable.
- Creditor has agreed to receive less than initially contracted
