Substitutes for Ordinary Income: Definition & Examples


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question 1 of 3

Which of the following is considered ordinary income?

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1. What is the maximum tax bracket at which capital gains can be taxed?

2. At what percentage was someone taxed if they made over $600,000 a year in 2017?

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About This Quiz & Worksheet

What do you know about substitutes for ordinary income? Quiz yourself on key topics like an example of ordinary income and the minimum tax bracket for capital gains.

Quiz & Worksheet Goals

You'll need to know the following:

  • Tax percentage for somebody who earns over $600,000 per year
  • When the sale of an asset is taxed as ordinary income
  • What is taxed as ordinary income according to Commissioner v. Phillips

Skills Practiced

  • Information recall - access the knowledge you've gained regarding the tax bracket for capital gains
  • Knowledge application - use your knowledge to answer questions about an example of ordinary income and when the sale of an asset is taxed as ordinary income
  • Making connections - use your understanding of the 1960 court case of Commissioner v. Phillips and how it's connected to ordinary income

Additional Learning

Feel free to learn more about taxable income with the lesson entitled Substitutes for Ordinary Income: Definition & Examples. The following topics are discussed:

  • States that have no income tax
  • Difference in tax rates between ordinary income and capital gains
  • Explanation of a substitute for ordinary income
  • Examples of substitutes for ordinary income
Final Exam
Chapter Exam
Capital Gains & Losses
Chapter too short for exam