A tax preference item is an item of income or deduction that gives a taxpayer a preferential tax treatment. The most common tax preference items are deductions for certain expenses, such as home mortgage interest and state and local taxes. Can you differentiate an AMT preference from an AMT adjustment? An AMT preference is an … Read more
A non-resident is an individual who does not have residency in the country in which they are earning an income. Non-residents are typically subject to different tax rates than residents, as well as different filing requirements. What is the difference between nonresident and part year resident? The main difference between a nonresident and part year … Read more
Farm income is the money earned from the sale of farm products and services. This includes income from crops, livestock, and other farm-related businesses. Farm income can be used to pay for farm expenses, taxes, and other debts. It can also be used to reinvest in the farm, or to provide income for the farm … Read more
Section 988 is a section of the US tax code that deals with foreign currency transactions. It was added to the tax code in 1978 in order to prevent US taxpayers from using foreign currency to avoid paying taxes. Under Section 988, any gain or loss from a foreign currency transaction is treated as a … Read more
A passive activity is an activity that generates income but does not involve active participation from the person earning the income. Passive activities include renting property, investing in a business, or earning royalties from a book or patent. The IRS classifies passive activities into two categories: trade or business activities, and investments. Trade or business … Read more
A tax deed is a document that proves ownership of a piece of property. The deed is issued by the government after the owner has paid all of the taxes on the property. What is a contract quizlet? A contract quizlet is a short, interactive quiz that tests your knowledge of a specific topic. They … Read more
How does it work? What are some examples? What Is an Excise Tax? Excise taxes are taxes levied on the sale or production of certain goods. They are typically imposed on items with a high social or health cost, such as alcohol, cigarettes, and gasoline. How Do Excise Taxes Work? Excise taxes are typically imposed … Read more
Depreciable property is any type of property that is used for business or investment purposes and that has a useful life of more than one year. The most common examples of depreciable property are buildings, machinery, equipment, and vehicles. In order to claim depreciation deductions, the property must be used in a business or for … Read more
The term “taxation without representation” refers to the idea that a government should not be allowed to tax a citizen without that citizen having a say in how that government is run. This concept is often cited as one of the main reasons for the American Revolution. In the years leading up to the Revolution, … Read more
The Internal Revenue Service (IRS) Publication 551, Basis of Assets, is a document that provides guidance on how to determine the basis of assets for tax purposes. The basis of an asset is its cost or other value used to determine gain or loss when the asset is sold. What can be included in cost … Read more
