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Simple English definitions for legal terms

net-worth method

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A quick definition of net-worth method:

The net-worth method is a way the government figures out how much money someone made in a year when they didn't keep good records. They look at how much the person's total worth changed over the year, and use that to figure out how much money they made. They also take out any money that doesn't count as income and any expenses that can't be deducted.

A more thorough explanation:

The net-worth method is a procedure used by the Internal Revenue Service (IRS) to determine the taxable income of a taxpayer who does not keep adequate records. This method calculates the change in net worth for the year, which determines the taxpayer's gross income, after taking into account nontaxable receipts and nondeductible expenses.

Let's say John is a freelance graphic designer who did not keep track of his income and expenses throughout the year. The IRS can use the net-worth method to determine his taxable income. If John's net worth increased by $50,000 during the year, the IRS would assume that this increase came from taxable income. However, if John received a gift of $10,000 from his parents during the year, this amount would be considered nontaxable and would not be included in his taxable income calculation.

Another example could be a small business owner who did not keep track of their income and expenses. The IRS could use the net-worth method to determine their taxable income by calculating the change in net worth for the year.

Overall, the net-worth method is a way for the IRS to estimate a taxpayer's income when they do not have adequate records. It is important for taxpayers to keep accurate records to avoid having the IRS use this method to determine their taxable income.

net worth | net yield

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THATS SO FUNNY
i cant i would go crazy
JumpySubsequentDolphin
20:50
i need to know who decided to do that.
JumpySubsequentDolphin
20:50
omg im on a plane weeeee
the devil
youre on a plane??? LSD made the mile high club??
20:50
yo splitterus are you in school already
20:50
it says ur c/o 2027
JumpySubsequentDolphin
20:51
@SplitterusClitterus: HAHAH yes
ur user is hilarioussss and no i just graduated this may and am now applying ---also im out of messages so ill take a lil
20:52
roger dat. see u in heck
im back, r u applying this cycle too
JumpySubsequentDolphin
21:32
this child fell asleep on me
JumpySubsequentDolphin
21:32
im so uncomfortable
just push him off the entire seat
JumpySubsequentDolphin
21:34
LMAOOOO
JumpySubsequentDolphin
21:35
no he’s literally like 8 and he fully just put his head on my bicep and slept
JumpySubsequentDolphin
21:35
he has since moved
22:12
@SplitterusClitterus: me yesterday
gulc baby pls text me back... i miss you ...... :(
22:23
i just went into a discord vc and yelled "YALL I JUST GOT INTO J.M. SCHOOL OF LAW"
22:24
people were getting excited :sob:
22:25
then someone was like "what does jm stand for" and i was like .. well
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@JumpySubsequentDolphin: wait this is so cute, also where r u going
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JumpySubsequentDolphin
22:39
@splitty Oregon!
oh yay for what thats so random
JumpySubsequentDolphin
22:45
haha my brother and sister in law live there
so cutie oregon is beatiful
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