3. Vocabulary - Taxable income terminology Taxable Income Terminology Match the terms relating to the basic terminology and concepts of personal finance on the left with the descriptions of the terms on the right. Read each description carefully and type the letter of the description in the Answer column next to the correct term. These are not necessarily complete definitions, but there is only one possible answer for each term. Term Answer Description A. This is used to offset passive income. Gross income Active income Portfolio income Passive income B. This term includes income from tax shelters. C. This is used to determine tax liability. D. This item is taxed at different rates depending on the holding period. E. Income from savings accounts, stocks, bonds, mutual funds, options, and futures are included in this term. Investment expenses F. This term includes wages, salaries, bonuses/commissions, and interest/dividends/alimony. Real estate or limited partnership expenses Capital gains Sale of a home Taxable income Tax liability G. This term refers to income earned on the job. H. Investment income is offset with this related expense. I. Using taxable income, it is based on tax tables or tax rate schedules. J. During this transaction, you can exclude the first $250,000 $500,000 for married taxpayers) of gain on sale