When Calculating Federal Income Taxes,"income" Includes All of the Following

question 47

Multiple Choice

When calculating federal income taxes,"income" includes all of the following categories except

• A) Earned income.
• B) Alimony.
• C) Investment income.
• D) Active income.
• E) Passive income.

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Definitions:

Semi-annual Scholarships

Scholarships awarded twice a year, often to support the educational expenses of students.

Compounded Annually

Pertains to the calculation of interest on both the initial principal and the accumulated interest from previous periods, applied once per year.

Perpetuity

A financial instrument that pays a constant stream of interest payments indefinitely.

Compounded Monthly

Calculating interest on a principal sum along with any accumulated interest of the previous periods with each cycle occurring every month.