The following represent elements of the tax formula for individual taxpayers:
A.Income from any source
B.Personal and dependency exemptions
C.Itemized deductions
D.Deductions for A.G.I.
E.Exclusions from gross income
F.Standard deduction amount
Which of the above are subtracted from A.G.I, in the computation of taxable income?
A)B, D, and F
B)B, C, and F
C)B and C or B and F
D)C and F or B and C

Question

The following represent elements of the tax formula for individual taxpayers: 
A.Income from any source
B.Personal and dependency exemptions
C.Itemized deductions
D.Deductions for A.G.I.
E.Exclusions from gross income
F.Standard deduction amount
Which of the above are subtracted from A.G.I, in the computation of taxable income?
A)B, D, and F
B)B, C, and F
C)B and C or B and F
D)C and F or B and C

Quizplus · Accepted Answer

Personal and dependency exemptions (B) and exclusions from gross income (E) are not subtracted from A.G.I. in the computation of taxable income. Deductions for A.G.I. (D) are subtracted from A.G.I. before arriving at adjusted gross income (A.G.I.), while itemized deductions (C) and the standard deduction amount (F) are subtracted from A.G.I. to arrive at taxable income. Therefore, the best choice is C as both B and either C or F are subtracted from A.G.I. to calculate taxable income.

The Following Represent Elements of the Tax Formula for Individual