Summarize the relationship between an asset's classification and its tax treatment for a sale or exchange.

Chapter 10 - Overview

Describe the difference between tax credits and deductions, and explain the tax credit for children.

Explain the tax credit for dependent-care expenses.

Explain the "American" opportunity credit and the "Lifetime" learning credit.

Chapter 11 - Overview

Explain what is meant by cost recovery, recovery method, and recovery period, and identify four basic conditions for the allowance of cost recovery deductions.

Explain how accelerated cost recovery systems (ACRS and MACRS) allow the recovery of investment capital for income tax purposes.

Explain the limitations on passive activity losses and credits.

Explain the rules regarding the deductibility of expenses for home offices and vacation homes.