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10 Cards in this Set
- Front
- Back
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power to tax
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The source of Congressional Power to tax comes from THE CONSTITUTION, not the 16th Amendment
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gross income
defined |
all income from any source (“whatever source derived”), including but not limited to (if not listed, doesn’t mean its not gross income):
a. compensation for services, including fees, commissions, fringe benefits, and similar items b. gross income derived from business c. gains derived from dealings in property d. interest e. rents f. royalties g. dividends h. alimony and separate maintenance payments i. annuities j. income from life insurance and endowment contracts k. pensions l. income from discharge of indebtedness m. distributive share of partnership gross income n. income in respect of a decedent, and o. income from an interest in an estate or trust |
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glenshaw glass
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gi is the money you report to the IRS. How much money you make during the year
glenshaw glass defines GI as a realized accession to wealth over which a taxpayer has control. You have to realize the gain (sell, trade, dispose). |
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cesarini
treasure trove receipt of economic benefit |
guy found 4500 in piano which didn’t have an identifiable owner, so he gets to keep it!
GI right away. Realized the money right when he finds it. |
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buy pen at garage sale for 1 dollar. Gets appraised and finds out its worth 200k
GI? |
Not until disposition
even though paid for it, its not GI until realized. Basically, IF PAY, NO GI UNTIL DISPOSITION. If you find something, GI immediately |
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buy house and its contents- find jewels inside.
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You have GI once you dispose of it.
Since paid for house and everything in it, not GI |
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buy house and NOT contents find jewels worth 30k.
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GI right away
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old colony
substance over form |
company paid income taxes for its employee.
GI? Yes! Substance over form: doesnt matter what we call it, it matters what the IRS says it really is. Ex: dad sells car for 1.00. looks more like a gift. Why structured as sale? To avoid gift taxes. IRS would call it a gift. |
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whats not gi?
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getting house appraised is not GI
buy something and find out its worth more- not GI until disposition. (piano for 100, worth 100k) unrealized gains (appreciation during your ownership) are not gross income if there is a bargain purchase, it is not gross income |
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once the definition of gross income is met
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it is the burden of the taxpayer to find an exclusion that the amount should not be included as gross income
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