Tax4001- Chapter 5 Already Passed

Unearned Income {Ans: income from property that accrues as time passes w/o effort on the part of the owner of the property i.e. gains/losses from the sale of property, dividends, interest, rents, royalties, and annuities}Annuity {Ans: an investment that pays a stream of equal payments over time}Constructive Receipt Doctrine {Ans: states that income is realized and recognized when it is actually received or constructively received ( when the income is unconditionally available, and there are no restrictions on taxpayer's control over the income)}to subsidize/encourage particular activities to be fair to taxpayers {Ans: congress allows most exclusions and deferral for two primary reasons:}Coverdell {Ans: With a _____________________ account, yearly contributions to the account are limited to $2,000 for each beneficiary, and distributions may be used to pay for qualified educational costs of kindergarten through 12th grade and qualified higher education expenses such as tuition, books, fees, supplies, and reasonable room and board}gambling losses {Ans: taxpayers are allowed to deduct their ___________________ to the extent of their gambling winnings}