Question

Components to Taxable Income Terminology

Match the terms relating to the basic terminology and concepts of personal taxation on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term.

These are not necessarily complete definitions, but there is only one possible answer for each term.

Term	Answer	Description
Adjustments		A. This is taxed as ordinary income if held less than 12 months.
Adjusted gross income	F	B. Taken against gross income, they result in AGI.
Deductions	B	C. Reduce AGI by the standard deduction and allowable exemptions.
Standard deduction		D. Examples of this term include charitable deductions, state and local taxes, and moving expenses.
Itemized deduction		E. This can be claimed if taxpayer provides more than half their support.
Exemption	E	F. This is used to calculate limits for certain itemized deductions.
Itemized deduction example		G. These are charitable contributions.
Capital gains tax categories		H. This term includes all income less certain allowable adjustments.
Steps to AGI	H	I. This is a blanket deduction that includes various deductible expenses normally incurred by taxpayers.
Steps to taxable income	C	J. This can be either standard or itemized.

Answer 1

Adjustments	B	Taken against gross income, they result in AGI.
Adjusted gross income	H	This term includes all income less certain allowable adjustments.
Deductions	J	This can be either standard or itemized.
Standard deduction	I	This is a blanket deduction that includes various deductible expenses normally incurred by taxpayers.
Itemized deduction	D	Examples of this term include charitable deductions, state and local taxes, and moving expenses.
Exemption	E	This can be claimed if taxpayer provides more than half their support.
Itemized deduction example	G	These are charitable contributions.
Capital gains tax categories	A	This is taxed as ordinary income if held less than 12 months.
Steps to AGI	F	This is used to calculate limits for certain itemized deductions.
Steps to taxable income	C	Reduce AGI by the standard deduction and allowable exemptions.