ACCT4405 Lecture Notes - Lecture 24: Foreign Tax Credit, Standard Deduction, Itemized Deduction
Document Summary
Income inclusions: gifts/inheritance, life insurance, death benefits, scholarships, compensation for harm/injuries, mental taxable, physical long term not taxable, physical short term taxable, health plans. (can do both if you"ve earned enough income) Bonafide resident rule - perm res or be in any foreign country for 330 days for. Tax exempt interest: interest paid on state or local bonds. What you use to pay for college. Become taxable when you sell the stock. If i get a deduction i have to pay tax on it down the line. If i get it as income i can deduct it as an expense. If i get a state refund and use the federal itemized deduction there is income to me. If i get a state refund and use the federal standard deduction there is no income to me. When you have a loan with little or no interest the irs taxes you based on fair market value rates.