William L. Rudkin Testamentary Trust U/W/O Henry A. Rudkin, Michael J. Knight, Trustee - Page 5

                                        - 5 -                                         
          position of $9,976.  However, on account of the alternative                 
          minimum tax, the parties are in further agreement that the                  
          resultant deficiency if respondent’s position is sustained                  
          remains unchanged at $4,448.                                                
                                       OPINION                                        
          I.  General Rules                                                           
               As a general rule, the Internal Revenue Code imposes a                 
          Federal tax on the taxable income of every individual and trust.            
          Sec. 1.  Taxable income is defined as gross income less allowable           
          deductions.  Sec. 63(a).  Gross income broadly comprises “all               
          income from whatever source derived,” sec. 61(a), and allowable             
          deductions are calculated through application of a multi-tiered             
          process.  First, certain enumerated deductions may be subtracted            
          from gross income to arrive at adjusted gross income.  Sec.                 
          62(a).  Itemized deductions may then be subtracted from adjusted            
          gross income in arriving at taxable income.  Sec. 63(d).                    
               Itemized deductions, however, are further segregated into              
          two categories that impact on their deductibility.  Section 67(b)           
          sets forth a list of itemized deductions allowed without further            
          limitation to the extent permitted under the appropriate                    
          statutory section authorizing the deduction.  For individual                
          taxpayers, the remaining itemized deductions are characterized as           
          “miscellaneous itemized deductions” and are allowed under section           
          67(a) only to the extent that they exceed 2 percent of adjusted             






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011