SOUTH-WESTERN FEDERAL TAXATION
2024 COMPREHENSIVE VOLUME 47TH
EDITION YOUNG PERSELLIN NELLEN
MALONEY CUCCIA LASSAR CRIPE TEST
BANK LATEST CERTIFICATION REVIEW SET
2026 ANSWERS GUARANTEED PASS
⫸ Deductions from adjusted gross income. Answer: The Federal
income tax is not imposed upon gross income. Rather, it is imposed
upon taxable income. Congressionally identified deductions for
individual taxpayers are subtracted either from gross income to arrive at
adjusted gross income or from adjusted gross income to arrive at the tax
base, taxable income.
⫸ Hobby loss. Answer: Losses from an activity not engaged in for
profit. The Code restricts the amount of losses that an individual can
deduct for hobby activities so that these transactions cannot be used to
offset income from other sources. § 183.
⫸ Ordinary and necessary. Answer: An ordinary expense is common
and accepted in the general industry or type of activity in which the
taxpayer is engaged. It comprises one of the tests for the deductibility of
expenses incurred or paid in connection with a trade or business; for the
production or collection of income; for the management, conservation,
or maintenance of property held for the production of income; or in
connection with the determination, collection, or refund of any tax. §§
162(a) and 212. A necessary expense is appropriate and helpful in
2024 COMPREHENSIVE VOLUME 47TH
EDITION YOUNG PERSELLIN NELLEN
MALONEY CUCCIA LASSAR CRIPE TEST
BANK LATEST CERTIFICATION REVIEW SET
2026 ANSWERS GUARANTEED PASS
⫸ Deductions from adjusted gross income. Answer: The Federal
income tax is not imposed upon gross income. Rather, it is imposed
upon taxable income. Congressionally identified deductions for
individual taxpayers are subtracted either from gross income to arrive at
adjusted gross income or from adjusted gross income to arrive at the tax
base, taxable income.
⫸ Hobby loss. Answer: Losses from an activity not engaged in for
profit. The Code restricts the amount of losses that an individual can
deduct for hobby activities so that these transactions cannot be used to
offset income from other sources. § 183.
⫸ Ordinary and necessary. Answer: An ordinary expense is common
and accepted in the general industry or type of activity in which the
taxpayer is engaged. It comprises one of the tests for the deductibility of
expenses incurred or paid in connection with a trade or business; for the
production or collection of income; for the management, conservation,
or maintenance of property held for the production of income; or in
connection with the determination, collection, or refund of any tax. §§
162(a) and 212. A necessary expense is appropriate and helpful in
