[Anonymous]

Hi

Can someone tell me if “includible in gross income” and “taxable” mean the same thing…

Thanks

[tbstew]

Nope, they are worlds apart, really. There are a lot of deductions from gross income (alimony, HSA contribution, and a bunch of others) to arrive at adjusted gross income. Then you have either your standard deduction or itemized deductions, plus a personal exemption (for individuals or trusts). After all those deductions/exemptions, you now have taxable income.

If you're planning on taking REG sometime soon, I highly recommend investing in a review course (if you haven't already). Concepts like these are fundamental to the exam, so you'll want to know them backwards and forwards.

Good luck!

AUD - 79
BEC - 88
REG - 87
FAR - 86 - Woot, all done!
Ethics - 100

[perniva]

Almost all income is Gross Income. Most of it ends up being taxed in Taxable Income. There are only few exceptions that I can remember where some income didn't go to GI…I think one is vacation home rental income when the cash flow is very insignificant.

FAR 05/29/11 #82
AUD 08/31/11 #86
REG 11/29/11 #72
REG 01/17/12 #89
BEC 02/29/12 #75

Becker 2011
TEXAS

[kmwgrace]

Becker flashcard #2 for REG lecture #1 is the basic tax formula:

Gross income

less deductions for AGI

---

Adjusted gross income (AGI)

less deductions from AGI (greater of standard or itemized)

less exemptions

---

Taxable income (TI)

x Tax rate

---

Gross tax liability

less credits and prepayments

---

Tax due or refund.

Hope that helps!

~ Kate... MTX!
CPA exam on hold while I homeschool my 6 year old!

[kmwgrace]

The definition of “gross income” is “all income from whatever source derived.” Not all income is taxable income.

~ Kate... MTX!
CPA exam on hold while I homeschool my 6 year old!

[Author]

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