TAX 4001 EXAM 1 QUESTIONS| WITH
ALREADY SOLVED CORRECTLY
ANSWERS!! | ASSURED SUCCESS
Tax Formula - 🧠ANSWER ✔✔Income (broadly defined)
- Exclusions
_____________________
Gross Income
- Deductions (for AGI)
______________________
Adjusted Gross Income
- Deductions (from AGI)
(greater of either Total Itemized
or Standard Deduction !and!
- Personal Exemptions
- Dependency Exemptions
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
1
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,______________________
Taxable Income
[Tax Calculation]
__________________________
Tax on Taxable Income
- Tax Credits
______________________
Tax Due / (Tax Refund)
Income (Broadly Defined) - 🧠ANSWER ✔✔Includes all taxpayer's income,
both taxable and nontaxable
= gross receipts
does not include return of capital (return of original investment but excess
returns aka profit are included, get to this later)
nor does it include receipt of borrowed funds (for when you take out a loan)
Exclusions - 🧠ANSWER ✔✔Income that Congress excludes from income
tax base (income tax base is Gross Income)
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
2
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,Gross Income ; realized vs unrealized gains? - 🧠ANSWER ✔✔Gross
Income = Income - Exclusions
Unrealized gains are NOT income
Realized Gains ARE income
Categories of Deductions - 🧠ANSWER ✔✔Deductions for AGI
Deductions from AGI
Deductions for AGI
what do they include? - 🧠ANSWER ✔✔above the line deductions
business expenses
ordinary and necessary expenses incurred in a trade or business
one half of self-employment tax paid
alimony paid
certain payments to an IRA and Health Savings Accounts
CAPITAL LOSS DEDUCTIONS
unreimbursed moving expenses
fees for college tuition and related expenses
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
3
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, interest on student loans
Adjusted Gross Income - 🧠ANSWER ✔✔Basis for computing % limitations
on certain itemized deductions like
medical expenses
charitable contributions
certain casualty losses
(ex. medical expenses are deductible only to the extent that they exceed
10% of AGI)
(this is a 10% "floor" under the medical expense deduction, so you can only
(itemized) deduct the medical expenses that you incur in a year that
exceed 10% of your AGI, so the total medical expense you can itemize
deduct = [medical expenses - 10%(AGI)], and if this value is 0 or negative
then you can't itemize deduct any medical expense
Deductions from AGI - 🧠ANSWER ✔✔Below the line deductions
Include everything deducted from AGI to get to taxable income:
1) The greater of either:
Total Itemized Deductions -or-
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
4
PRIVACY STATEMENT. ALL RIGHTS RESERVED
ALREADY SOLVED CORRECTLY
ANSWERS!! | ASSURED SUCCESS
Tax Formula - 🧠ANSWER ✔✔Income (broadly defined)
- Exclusions
_____________________
Gross Income
- Deductions (for AGI)
______________________
Adjusted Gross Income
- Deductions (from AGI)
(greater of either Total Itemized
or Standard Deduction !and!
- Personal Exemptions
- Dependency Exemptions
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
1
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,______________________
Taxable Income
[Tax Calculation]
__________________________
Tax on Taxable Income
- Tax Credits
______________________
Tax Due / (Tax Refund)
Income (Broadly Defined) - 🧠ANSWER ✔✔Includes all taxpayer's income,
both taxable and nontaxable
= gross receipts
does not include return of capital (return of original investment but excess
returns aka profit are included, get to this later)
nor does it include receipt of borrowed funds (for when you take out a loan)
Exclusions - 🧠ANSWER ✔✔Income that Congress excludes from income
tax base (income tax base is Gross Income)
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
2
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,Gross Income ; realized vs unrealized gains? - 🧠ANSWER ✔✔Gross
Income = Income - Exclusions
Unrealized gains are NOT income
Realized Gains ARE income
Categories of Deductions - 🧠ANSWER ✔✔Deductions for AGI
Deductions from AGI
Deductions for AGI
what do they include? - 🧠ANSWER ✔✔above the line deductions
business expenses
ordinary and necessary expenses incurred in a trade or business
one half of self-employment tax paid
alimony paid
certain payments to an IRA and Health Savings Accounts
CAPITAL LOSS DEDUCTIONS
unreimbursed moving expenses
fees for college tuition and related expenses
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
3
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, interest on student loans
Adjusted Gross Income - 🧠ANSWER ✔✔Basis for computing % limitations
on certain itemized deductions like
medical expenses
charitable contributions
certain casualty losses
(ex. medical expenses are deductible only to the extent that they exceed
10% of AGI)
(this is a 10% "floor" under the medical expense deduction, so you can only
(itemized) deduct the medical expenses that you incur in a year that
exceed 10% of your AGI, so the total medical expense you can itemize
deduct = [medical expenses - 10%(AGI)], and if this value is 0 or negative
then you can't itemize deduct any medical expense
Deductions from AGI - 🧠ANSWER ✔✔Below the line deductions
Include everything deducted from AGI to get to taxable income:
1) The greater of either:
Total Itemized Deductions -or-
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
4
PRIVACY STATEMENT. ALL RIGHTS RESERVED
