Gross Income & Exclusions
Undeniable accessions to wealth, clearly realized and over which taxpayers have complete dominion.
This is a type of receipt that is generally not taxable because it must be repaid.
Loans
under §1001, how is the gain from the sale or other disposition of property calculated?
amount realized minus adjusted basis
According to §162, what are the three types of expenses specifically mentioned as deductible business expenses?
reasonable salaries, traveling expenses, and rental payments
Taxable Income is determined by first determining gross income, subtracting above the line to get adjusted gross income and then subtracted what type of deductions.
below the line deductions
This type of transfer is generally excluded from gross income, unless it's from an employer to an employee.
102 - gifts
the case that established that a gift stems from a "detached and distinterested generosity" is what?
Commissioner v. Duberstein
according to §1012, what is the general rule for determine the basis of the property?
For traveling expenses to be deductible, they need to be not lavish or extravagant under the circumstances, and expensed in the pursuit of a trade or business while away from home overnight. According to the IRS, home means...
PPB (Principal Place of Business) - where you earn your income.
this is the way the taxpayer is encouraged to decide whether to take the standard or itemized deductions.
whichever is greater
under 104, damaged received for this type of injury are excluded from gross income.
Personal physical injuries or physical sickness
in the crane v. comisioner case, what did the court rule should be included in the amoutn realized when selling property subject to a mortgage?
any cash received and fmv of any property received plus the amount of the liability assumed
Bob bought a share of stock for $100 and donated it to charity three years later on March 1. The share was priced at $150 the day he gave it to the charity. On December 31st it was worth $175.
a $150 dollar deduction from gross income
business expenses incurred by employees and unreimbursed are known as this and subject to this code section.
miscellaneous itemized deductions are subject to 67(g).
if a scholarship is received as _______ may disqualify the scholarship from being excluded from gross income even if all of the other conditions are met under 117.
compensation for services
under 104, unlike emotional distress, this type of damages received in a personal injury lawsuit is explicitly not excluded from gross income, even if related to physical injuries or sickness?
punitive damages
under 1015, if property is received as a gift and the donor's basis was greater than the fair market value at the time of the gift, what basis does the donee use to determe a loss?
the FMV at the time of the gift
For educational expenses to be deductible it is required that they are either
maintenance or improvement of skills in employment or trade/business
OR
as part of an express requirement by employer to stay employed.
Jake who is self employed at her own law firm spent $500 on office supplies for her work-from-home setup. How will Sarah's expenses be treated for tax purposes under §67(g)?
67(g) will not apply, they will be treated under 62(a)(1). Her expenses will be deductible under 162 as ordinary and necessary business expenses.
under §74, these specific conditions must be met for a prize or award made in recognition of religious, charitable, scientific, educational, artistic, literary, or civic achievement to be excluded from gross income.
The recipient was selected without any action on his part to enter the contest or proceeding
The recipient is not required to render substantial future services as a condition to receiving the prize of award; AND
The prize or award is transferred by the payer to a government unit or organization
According to §101, this specific type of insurance proceeds is generally excluded from gross income but ONLY IF
the proceeds are payable by reason of death.
In Commissioner v. Tufts, what did the Court rule about the amount realized when disposing of property encumbered by a non-recourse mortgage that exceeds the property's fair market value?
the entire amount of the mortgage, regardless of the property's fair market value
in the context of 162 deduction for traveling expenses, when is a taxpayer considered no longer being away from home?
if their location of employment lasts longer than one year under a fact and circumstances analysis.
According to §199A, what percentage of qualified business income can taxpayers deduct for a qualified trade or business?
20%