RE-121 Chapter Thirteen Crossword Puzzle: Income Taxation and Real Estate

Taxation Concepts

• A tax credit is an amount of money that can be offset against a tax liability.
• Inventory property is property held primarily for sale to customers.
• A tax-free exchange, also known as a Section 1031 exchange, allows taxation of the gain to be deferred when like-kind property is exchanged.
• Initial acquisition cost refers to the cost of acquiring a property or asset.
• Marginal tax rate is the rate that will apply to the last dollar that a taxpayer earns.

Tax Terms

• Income tax is a compulsory contribution to state revenue, levied by the government on workers' income and business profits.
• A capital gain refers to profit that results from a sale of a capital asset, such as stock, bond, or real estate, where the sale price exceeds the purchase price.

Tax Rules and Expenses

• A tax form is a federal government document that details the rules individuals and businesses must follow in paying taxes to the government.
• A deductible expense is an expense that can be used to reduce taxable income.
• A trade or business generally includes any activity carried on for the production of income from selling goods or performing services.
• Taxable income includes any economic benefit realized by a taxpayer that isn't excluded from income by the tax code.
• Capital expenditures are a type of expenditure.