About This Chapter
Business Income Calculations - Chapter Summary
This mobile-friendly chapter covers a variety of business income calculation topics. Our expert instructors will help you understand concepts like the cost of goods sold, net income and loss, gross income, at-risk limitation and much more. Reviewing this chapter can help you:
- Calculate the cost of goods sold
- Differentiate between gross and net income
- Use the formula for net loss
- Explain the rules regarding passive activity loss and tax shelters
- Understand at-risk limitation requirements
- Assess the tax obligations of debt cancellation
Each lesson comes with a short quiz that covers important business income terms, formulas and concepts. Try the chapter exam, and submit questions to our instructors if you need any extra help with the material. The chapter is also accessible on any Internet-connected device, which allows you to study at school, at work, at home or wherever you happen to be.
1. Cost of Goods Sold (COGS): Calculation & Example
After reading this lesson, you'll be able to calculate the cost of goods sold for any business. You'll learn the formula to use as well as how this number benefits you tax-wise.
2. Gross & Net Income: Definition & Examples
On any income statement, you will see two different numbers reported as income - one called 'gross' and one called 'net.' In this lesson, we'll explain the difference between these two numbers.
3. Net Loss: Definition & Formula
Business owners hope that each period, the money brought in is more than the money paid out. But that's not always the case. In this lesson, you'll learn the definition and formula for net loss, and why it can be bad news for business owners.
4. Tax Shelters & Passive Activity Loss: Definition & Rules
In this lesson, you will learn about the tax benefits of real estate. We will cover the definitions of tax shelters and passive activity losses. Understanding the rules of these topics can help a real estate investor become more profitable.
5. Cancellation of Debt: Tax Obligations & Filing
In this lesson we will discuss the tax consequences and reporting procedures a business is subjected to when it has received notice of debt forgiveness.
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Other chapters within the Special Enrollment Examination (SEE): Exam Prep & Study Guide course
- Preliminary Work for Personal Tax Preparation
- Income & Asset Tax for Individuals
- Retirement Income Taxation
- Real & Personal Property Taxes
- Itemized Tax Deductions for Individuals
- Tax Credits for Individuals
- Preparing Individual Taxes
- Advising Individual Taxpayers
- Specialized Tax Returns for Individuals
- Tax Considerations for Business Entities
- Tax Considerations for Business Partnerships
- Tax Considerations for Corporations
- Business Expenses, Deductions & Credits
- Analysis of Financial Reports
- Advising Business Taxpayers
- Specialized Tax Returns for Businesses
- Practices & Procedures of IRS Enrolled Agents
- Representation Before the IRS
- Representing the Taxpayer in the Collection Process
- Completing the Tax Filing Process
- Special Enrollment Examination (SEE) Flashcards