Midterm and Chapter 8 Notes

Midterm:
The ultimate goal of tax planning is not tax minimization
Taxpayers are generally allowed to claim deductions for expenditures unless a
specific tax provision indicates the expenditure is not deductible. (F)
Taxpayers filing single and taxpayers filing married separate have the same basic
standard deduction amount. (T)
Underreporting gross income over 25% threshold increases the statute of limitations
to 6 years.
Larger after-tax rate of return increases the benefits of income deferral.
The constructive receipt doctrine causes income to be recognized before it is
actually received.
Married Filing Jointly > Head of Household > Single
Claim of Right Rule that states that income has been realized when a taxpayer
receives the income and there are no restrictions on the taxpayers use of the
income (e.g no obligation to repay the amount)
Community property law state even if filing married-separate, take half of both
spouses and half of interest income, total all numbers.

Chapter 8 Notes: