ch 3 gottlieb tax

These flashcards cover key concepts related to tax planning strategies and their limitations.

Timing Strategy

A strategy that involves choosing the optimal time to recognize income or deductions to maximize tax savings.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return.

Income-Shifting Strategy

A strategy that exploits differences in tax rates across taxpayers by shifting income from high-tax-rate taxpayers to low-tax-rate taxpayers.

Conversion Strategy

A strategy that involves changing the nature of income or deductions to take advantage of different tax rates.

Constructive Receipt Doctrine

A tax principle requiring that income be recognized when it is actually or constructively received by the taxpayer.

Tax Avoidance

The legal practice of minimizing tax liabilities through planning strategies and deductions.

Tax Evasion

The illegal act of not paying taxes owed, often involving deceit or misrepresentation.

Accelerating Deductions

The timing strategy of taking deductions sooner to benefit from a higher tax rate.

Deferring Income

The strategy of delaying the recognition of income to a future period, often to benefit from lower tax rates.

Substance-over-Form Doctrine

A judicial doctrine allowing the IRS to reclassify a transaction based on its economic substance rather than its legal form.