Income Tax Foundations

• Define the objectives of U. S. tax law.
• Locate sources for information on U.S. tax law.
• Distinguish between instances of tax avoidance and tax evasion.
• Compare and contrast Generally Accepted Accounting Principles (GAAP) and income tax accounting.
• Identify the major components of Form 1040.
• Discover answers to tax questions using outside reference sources.
• Use tax preparation software.

Filing Status, Exemptions, and Gross Income part I

• Determine a taxpayer's filing status.
• Determine personal and dependency exemptions.
• Determine if a taxpayer must file a return.
• Determine all included, excluded, and exempt gross income items.
• Determine net business income.
• Determine net rent and other pass through income.

Property Transactions, Passive Activities, and Gross Income part II

• Recognize what constitutes a passive activity.
• Calculate basis.
• Determine gain or loss.
• Identify non-taxable property transactions.
• Determine taxable implications of the purchase, sale or exchange of property.
• Differentiate between deductible and non-deductible losses.
• Calculate taxable capital gains and losses.
• Compute gross income.

Adjustments to Gross Income and Itemized Deductions

• Identify deductions allowed in computing Adjusted Gross Income (AGI).
• Calculate itemized deductions.
• Compute taxable income.

Tax Computations and Analysis

• Identify tax preferences with regard to the Alternative Minimum Tax (AMT).
• Calculate applicable tax credits, payments and penalties.
• Calculate tax liability, refund, or amount due using a Form 1040.
• Propose year-end tax strategies to decrease taxable income.