文档介绍：Chapter 4
Gross e: Exclusions
Learning Objectives
Explain the conditions that must exist for an item to be excluded from gross e
Determine whether an item is e
Decide whether specific exclusions are available
Understand employment-related fringe benefit exclusion items
Items That Are Not e
• Unrealized e
Land valued at $20,000 beginning of year appreciates to $40,000 at end of year, the $20,000 increase in value is unrealized e and is not subject to tax.
Items That Are Not e
Self-help e
The amount saved is not subject to tax
Cleaning your own carpet
Repairing your car
Rental value of personal use property
Selling price of property
Only the gain, not the entire selling price
Major Statutory Exclusions
Social generosity or benevolence
Public assistance programs
Economic incentives
Exclusion of certain scholarships
Sec. 179
Confusion pensation or gift
Tax exempt interest
Gifts And Inheritance
Life Insurance Proceeds
Paid by reason of death, generally non-taxable
Policy matures or is surrendered, the excess of proceeds over the premiums paid is taxable to recipient
Dividends on life insurance and endowment policies are normally non-taxable because they are considered return of premiums paid
Adoption Expenses
Adoption credit - Congress provides tax benefits for qualified adoption expenses in the form of tax credits or an exclusion for amounts paid pursuant to an adoption assistance plan created by an employer
Employee is allowed a $5,000 per child exclusion ( $6,000 for a special needs child)
Awards For Meritorious Achievement
Awards for religious, charitable, scientific, etc. are not taxable if
Did not enter contest
Is not required to perform substantial future services
Designates a qualified anization to receive the payment
Scholarships And Fellowships
Scholarships are excluded for degree candidates
Tuition
Fees
Books
Supplies
Equipment
Not room and board