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    Discuss exemptions, constructive receipt, for/from AGI, Tax

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    Provide very general explanation (to readers who have never heard of these terms) about the following topics:

    1.- discuss the concept of DEPENDENCY EXEMPTION as it applies to the income tax of individuals
    2.- discuss the concept of CONSTRUCTIVE RECEIPT as it applies to the income tax of individuals
    3.- for individual tax purposes, what is the distinction between deduction FOR adjusted gross income and deduction FROM adjusted gross income important?
    4.- discuss the distinction between TREASURY REGULATIONS and REVENUE RULINGS and the role each plays
    5.- discuss what is covered by the term TAX LAW and the relative importance of its components.

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    Solution Preview

    1. The dependency exemption represents an amount which can be deducted from income of a taxpayer. The taxpayer must comply with rules used to qualify a person as a dependent of another. If the dependent meets the tests, the taxpayer is allowed to claim the dependent as a valid deduction on his tax return. Common dependents are children of the taxpayers, but the list of dependent types is longer. For example, if a taxpayer supports his elderly parent who has little or no income, that parent can become a dependent on the taxpayer's tax return.

    2. Constructive receipt is a doctrine used to determine when certain income is taxable to a taxpayer. It usually has to do with income that the taxpayer has not yet received. The doctrine states that if a taxpayer has the right to receive the money, even if he chooses not to, the income is ...

    Solution Summary

    In a 576 word, cited solution, the response gives a clear and concise explanation of the terms requested.