Chapter 4 Tax accounting questions with
correct answers respectively.
abandoned spouse ANS - a married taxpayer who lives apart from his or her spouse for the last six
months of the year (excluding temporary absences), who files a tax return separate from his or her
spouse, and who maintains a household for a qualifying child.
Adjusted gross income (AGI) ANS - gross income less deductions for AGI. AGI is an important reference
point that is often used in other calculations.
All-inclusive income concept ANS - a definition of income that says that gross income means all income
from whatever source derived.
alternative minimum tax (AMT) ANS - a tax on a broader tax base than the base for the "regular" tax;
the additional tax paid when the tentative minimum tax (based on the alternative minimum tax base)
exceeds the regular tax (based on the regular tax base). The alternative minimum tax is designed to
require tax payers to pay some minimum level of tax even when they have low or no regular taxable
income as a result of certain tax breaks in the tax code.
Character of income ANS - a type of income that is treated differently for tax purposes from other types
of income. Common income characters (or types of income) include ordinary, capital, and qualified
dividend.
Deductions ANS - amounts that are subtracted from gross income in calculating taxable income.
Deductions above the line ANS - for AGI deductions or deductions subtracted from gross income to
determine AGI.
Deductions below the line ANS - from AGI deductions or deductions subtracted from AGI to calculate
taxable income.
gross income ANS - realized income minus excluded and deferred income
correct answers respectively.
abandoned spouse ANS - a married taxpayer who lives apart from his or her spouse for the last six
months of the year (excluding temporary absences), who files a tax return separate from his or her
spouse, and who maintains a household for a qualifying child.
Adjusted gross income (AGI) ANS - gross income less deductions for AGI. AGI is an important reference
point that is often used in other calculations.
All-inclusive income concept ANS - a definition of income that says that gross income means all income
from whatever source derived.
alternative minimum tax (AMT) ANS - a tax on a broader tax base than the base for the "regular" tax;
the additional tax paid when the tentative minimum tax (based on the alternative minimum tax base)
exceeds the regular tax (based on the regular tax base). The alternative minimum tax is designed to
require tax payers to pay some minimum level of tax even when they have low or no regular taxable
income as a result of certain tax breaks in the tax code.
Character of income ANS - a type of income that is treated differently for tax purposes from other types
of income. Common income characters (or types of income) include ordinary, capital, and qualified
dividend.
Deductions ANS - amounts that are subtracted from gross income in calculating taxable income.
Deductions above the line ANS - for AGI deductions or deductions subtracted from gross income to
determine AGI.
Deductions below the line ANS - from AGI deductions or deductions subtracted from AGI to calculate
taxable income.
gross income ANS - realized income minus excluded and deferred income
