amount of money earned (which is collected or will be collected) from the sale of goods minus the cost of the goods sold; also called gross profit or gross margin. For example, if sales total $4000 and the cost of goods sold is $1200, the gross income is $2800 ($4000 - $1200). Gross profit less operating expenses equals net income.

total personal income before exclusions and deductions.

total of a taxpayer's income from any source, except items specifically excluded by the Internal Revenue Code and other items not subject to tax.

total income before adjustment for deduction as applied to tax calculation for both the individual and the firm.

total income from property before any expenses are deducted.

Example: A building with 10,000 net rentable square feet of floor space rents for an average of $10 per square foot. concessions in the lobby produce an additional $20,000 in annual income. An average 5% vacancy rate is maintained. Potential gross income and effective gross income are shown in Table 25.