TEST BANK CANADIAN INCOME TAXATION AND PLANING 25TH EDITION ALREADY GRADED 2023 Income

TEST BANK CANADIAN INCOME TAXATION AND PLANING 25TH EDITION ALREADY GRADED 2023
Income (Exclusions not included) = GI - Deductions FOR AGI = AGI - Greater of Standard or Itemized (Deductions FROM AGI) -Personal AND dependency exemptions = TI - Tax Formula
Except as otherwise provided..., all income from whatever source derived. Gross Income does not include unrealized gains - Gross Income
Gross Income - Alimony Received
Deduction for AGI - Alimony Paid
Gross Income - Dividends Received
Gross Income - Prizes
taxable - included in gross income - Punitive Damages
"above-the-line deductions", taken before AGI - Deductions FOR AGI
greater of itemized or standard deductions, personal and dependency exemptions - Deductions FROM AGI
deductions for AGI - Ordinary expenses incurred in trade/business
deductions for AGI - one-half of self-employment tax paid
deductions for AGI - Payments to traditional IRA
deductions for AGI - Interest on student loans
Deduction from AGI - Capital Loss
Basic standard deduction based on filing status + additional standard deduction (available for taxpayers 65 or over, blind) - Standard Deduction
-Married filing separately, when either spouse itemizes -nonresident aliens -individual filing return for tax yr less than 12 mos. b/c change in annual accounting period - Taxpayers Ineligible for Standard Deductions
Greater of: $1,050 or
$350 + earned income (not exceeding normal amount (6300) ) -Additional standard deduction is still available - Standard Deduction for Person Claimed as Dependent
One Personal for taxpayer, one dependency for each dependent (Cant be claimed twice) - Personal and dependency exemptions
qualifying child or qualifying relative - Dependency exemption
Meets Relationship, Abode, Age, and Support Test - Qualifying Child
Child must be taxpayers: son/daughter, stepson/daughter, bro/sis, stepbro/sis, half bro/sis, descendants of each NO COUSINS Adopted children Foster child may qualify - Qualifying Child Relationship Test
Must live with taxpayer for more than HALF of the year (temp absences for illness or education) - Qualifying Child Abode Test
Must be under 19 or under 24 if student Except for disabled - Qualifying Child Age Test
Individual must not be self-supporting, scholarships not considered to be support - Qualifying Child Support Test
Relationship, Gross Income, and Support Test - Qualifying Relative
-Lineal and collateral ascendants (parents, gparents, uncles/aunts) -Certain in-laws (once in-law always in-law survives divorce) -Unrelated parties who live with taxpayer ALL YEAR - Qualifying Relative Relationship Test
Dependent's GI must be less than exemption amount ($4050) - Qualifying Relative GI Test
Taxpayer must provide more than 50% support Exception: multiple support agreements, and children of divorced parents - Qualifying Relative Support Test
If dependent files a joint return the supporting taxpayer is not permitted a dependency exemption. Can't file if they owe any tax - Joint Return Test
Dependent must be US citizen or resident of US, Canada, or Mexico for some part of calendar year - Citizenship or Residency Test
Unmarried, or separated by divorce decree, -marital status determined as of the LAST day of the tax year (if spouse dies during year, marital status is kept through full year) - Single Filing Status
Married as of last day of taxable year or spouse dies during year (MFJ for full year) - MFJ Filing Status
Same tax bracket as MFJ For 2 years after death of spouse if taxpayer maintains a home in which dependent child lives - Surviving Spouse Filing Status
Married but not filing with spouse - MFS Filing Status
-Must be unmarried as of end of year OR Abandoned Spouse -Must pay> half cost of maintaining a household which is principal home of a dependent > half of tax year -Dependent cannot be unrelated third party - Head of Household Filing Status
HH may be claimed if taxpayer maintains a separate home for his/her parents (at least one must qualify as a dependent) - HH Exception
To file as HH taxpayer: -Doesn't file a joint return -Paid > half cost of maintaining a home -Spouse did not live in home during last 6 months of tax yr -Home was principal residence of taxpayer's child for > half yr Otherwise MFS - Abandoned Spouse
GI >= sum of standard deduction and exemption amt. - Tax return must be filed
Tax Return due on 4/15, may obtain 6 month extension of time to FILE not to PAY - Tax Return Due
highest rate applied in a tax computation - Marginal Tax Rate
tax liability/ Taxable Income - Average Tax Rate
tax liability/ total income - Effective Tax Rate
Net Unearned Income of Child is taxed at parents' rate (unearned income - 2100) - Kiddie Tax
-Child has earned income exceeds half of his support -child is married and files joint return -both parents are deceased - Kiddie Tax doesn't apply