Refer to Exhibit 1. 1. For an individual, prepare a list of the following: a. Income items
Question:
1. For an individual, prepare a list of the following:
a. Income items that are taxed (specifically, items included in realized income)
b. Items excluded from realized income
c. Deductions and exemptions
d. Credits
Transcribed Image Text:
Corporation Economic income - Unrealized income = Reallized income ($61) - Exclusions = Gross Income - Deductions Individuals Economic Income - Unrealized income = Realized Income ($61) Exclusions Gross Income Deductions for AGI = Adjusted Gross Income (AGI) Deductions from AGI 1. Max (itemized deductions or the standard deduction) 2. Exemptions = Taxable income x Tax rates** = Gross tax Credits = Regular tax + Excess (if any) of tentative minimum tax over the regular tax*** = Federal Income tax llability Taxable income x Tax rate = Gross tax Credits Regular tax + Excess (if any) of tentative minimum tax over the regular tax** = Federal income tax llability
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Related Book For
Taxes And Business Strategy A Planning Approach
ISBN: 9780132752671
5th Edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon
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