tailieunhanh - Lecture Taxation of individuals and business entities 2015 (6/e) - Chapter 6: Individual deductions

Lecture Taxation of individuals and business entities 2015 (6/e) - Chapter 6: Individual deductions. After completing this chapter, students will be able to: Identify the common deductions necessary for calculating adjusted gross income (AGI); describe the different types of itemized deductions available to individuals and compute itemized deductions; explain the operation of the standard deduction, determine the deduction for personal and dependency exemptions, and compute taxable income. | Chapter 6 Individual Deductions Learning objectives Identify the common deductions necessary for calculating adjusted gross income (AGI) Describe the different types of itemized deductions available to individuals and compute itemized deductions Explain the operation of the standard deduction, determine the deduction for personal and dependency exemptions, and compute taxable income Deductions for AGI Three categories of deductions for AGI Directly related to business activities Indirectly related to business activities Deductions subsidizing specific activities Deductions for AGI Directly Related to Business Activities Taxpayers are allowed to deduct expenses incurred to generate business income For tax purposes activities are either profit-motivated or motivated by personal objectives Profit-motivated activities are classified as business activities (called “trade or business”) or investment activities Deductions for AGI Although both are motivated primarily by profit, business . | Chapter 6 Individual Deductions Learning objectives Identify the common deductions necessary for calculating adjusted gross income (AGI) Describe the different types of itemized deductions available to individuals and compute itemized deductions Explain the operation of the standard deduction, determine the deduction for personal and dependency exemptions, and compute taxable income Deductions for AGI Three categories of deductions for AGI Directly related to business activities Indirectly related to business activities Deductions subsidizing specific activities Deductions for AGI Directly Related to Business Activities Taxpayers are allowed to deduct expenses incurred to generate business income For tax purposes activities are either profit-motivated or motivated by personal objectives Profit-motivated activities are classified as business activities (called “trade or business”) or investment activities Deductions for AGI Although both are motivated primarily by profit, business activities are distinguished from investment activities: Trade or Business activities require a relatively high involvement or effort from the taxpayer where as investment activities don’t require Investment activities involve investing in property for appreciation or for income payments Deductions for AGI Trade or Business Expenses must be: directly connected to the business activity ordinary and necessary for the activity (., appropriate and helpful for generating a profit) reasonable in amount (not extravagant) Expenses are claimed on Schedule C Revenues from the same activity are also reported on the same Schedule C The net income or loss from Schedule C is transferred to Form 1040 (page 1) on line 12 Deductions for AGI Rental & Royalty Expenses Claimed above the line (for AGI) Could either be an investment activity or a trade activity depending on facts Taxpayers report expenses and revenue on Schedule E and transfer the net income or loss from Schedule E to Form 1040 (page 1), .

• Tài chính doanh nghiệp
• Business entities
• Individual taxation
• Multijurisdictional taxation
• Transfer taxes
• Individual deductions
• Deductions for AGI
• Urban market business entities
• Competitiveness of urban market business entities
• Market business entities
• Organization and management capacity
• Finance competence and business performance
• Essentials of taxation
• Business tax credits
• Corporate alternative minimum tax
• Limited liability entities
• Profits and distributions
• Entity legal classification
• Nontax characteristics
• Business income
• Accounting methods
• Operating partnerships
• Flow through entities
• The financial statements
• Business deductions
• Financial statements
• Loss limitations
• Property transactions
• Corporate taxation
• Nonliquidating distributions
• Corporate formation
• Taxable acquisitions
• Partnership interests
• Partnership distributions
• Operating distributions
• Post termination transition period
• Local taxes
• Income taxes
• Multinational transactions
• Taxing multinational transactions
• Wealth planning
• Tax rate structures
• Federal taxes
• Tax compliance
• Tax authorities
• Tax planning strategies
• Related limitations
• Individual income tax
• Filing status
• Gross income
• Recognize income