What does gross income mean on the CPA exam?
Gross income. All income from whatever source derived, unless the Code specifically excludes it. The starting point of every individual and corporate return.
Defined against Sec. 61(a).
Which CPA exam sections use gross income?
Gross income appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Related terms
- taxable income: The figure the tax rates are applied to: gross income, less the deductions the Code allows.
- earned income: Compensation for personal services -- wages, or net earnings from self-employment.
- net income: What is left after every revenue and expense of the period, including tax and discontinued operations.
- net investment income: Interest, dividends, capital gains, rents, royalties and income from passive businesses, less the deductions allocable to them.
- ordinary income: Income taxed at the regular graduated rates rather than at preferential capital gain rates.
- other comprehensive income: Gains and losses that bypass net income and sit in equity until realized, such as unrealized gains on available-for-sale debt securities and foreign currency translation.