ITA Test

Prompt

Act as a Master CPA and U.S. Federal Income Tax Professor. Your task is to generate a comprehensive, highly structured "Taxation Knowledge Map" covering U.S. individual and business federal income taxation. Follow the exact blueprint, taxonomy, and output rules specified below. --- ### **1. Structural Taxonomy Blueprint** Organize the Knowledge Map into 7 Core Pillars. Each pillar must include sub-topics, statutory IRC concepts, reporting schedules, key formulas, and rule thresholds: 1. **Filing Status & Dependents** - 5 Filing Statuses (Single, MFJ, MFS, Head of Household, Qualifying Surviving Spouse) & eligibility rules. - Qualifying Child vs. Qualifying Relative tests (Support, Relationship, Age, Abode, Gross Income). 2. **Gross Income Architecture (IRC §61)** - Inclusions: Wages/salaries, business income, interest, dividends, capital gains, rental income, alimony rules. - Exclusions: Municipal bond interest, life insurance proceeds, gifts/inheritances, section 121 principal residence gain exclusion. 3. **Deductions Framework (For AGI vs. From AGI)** - Deductions FOR AGI (Schedule 1): Educator expenses, HSA, self-employment tax (50%), IRA contributions, student loan interest. - Deductions FROM AGI: Standard Deduction vs. Itemized Deductions (Schedule A: SALT $10k cap, mortgage interest, charitable contributions, medical expenses > 7.5% AGI). - Qualified Business Income (QBI) Deduction (§199A) fundamentals. 4. **Business Income & Cost Recovery (Schedule C / Form 4562)** - Business Expense Allowance (§162: Ordinary, Necessary, Reasonable). - Accounting Methods: Cash vs. Accrual (economic performance & all-events tests). - Cost Recovery (Depreciation/Amortization): MACRS recovery periods (3, 5, 7, 15, 27.5, 39 yr), Section 179 expensing, Bonus Depreciation, Section 197 Amortization. - Deduction Limitations: Excess Business Loss rules & Business Interest Limitation (§163(j)). 5. **Property Transactions & Capital Gains (Schedule D / Form 4797)** - Basis Determination: Cost basis, Gift basis (dual-basis rule), Inherited basis (step-up). - Realized vs. Recognized Gain/Loss. - Asset Classification: Capital Assets (§1221) vs. Ordinary Assets vs. Section 1231 Assets. - Capital Gain Netting & Rates (Short-Term vs. Preferential Long-Term). - Depreciation Recapture (§1245 & §1250). 6. **Tax Computation & Tax Credits** - Progressive Tax Brackets vs. Preferential Rates (LTCG / Qualified Dividends). - Nonrefundable Credits: Child & Dependent Care Credit, Foreign Tax Credit. - Refundable / Partially Refundable Credits: Child Tax Credit (Form 8812), EITC, American Opportunity Credit (AOTC). 7. **Procedural Rules & Compliance** - Estimated Tax Payments & Safe Harbor rules. - Alternative Minimum Tax (AMT) basic framework. - Statute of Limitations & Audit rules. --- ### **2. Output Formatting Requirements** - **Markdown Hierarchy:** Use strictly structured Markdown headers (`#`, `##`, `###`) and nested bullet points. - **Form Annotations:** Tag every topic with its corresponding IRS Form/Schedule (e.g., `[Form 1040, Schedule C]`). - **Diagram Output:** Conclude with a complete, valid **Mermaid.js mindmap** code block (`mindmap` or `graph TD`) representing the top-level taxonomy so it can be rendered visually.