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CPA Exam - REG > 1 - Individual Tax > Flashcards

1 - Individual Tax Flashcards

Indiv Tax

1
Q

Schedule A

A

Itemized Deductions

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2
Q

Schedule B

A

Interest & Dividends

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3
Q

Schedule C

A

P&L - Trade or Business

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4
Q

Schedule D

A

Capital Gains & Losses

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5
Q

Schedule E

A

Supplemental Income and Loss (ROOF)

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6
Q

Schedule F

A

Farm Income

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7
Q

Form 1040X

A

Amended Return

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8
Q

Form 1116

A

Foreign Tax Credit

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9
Q

Form 4562

A

Depreciation and Amortization

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10
Q

Form 4797

A

Sale of L/T business property

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11
Q

What are Schedule E Items?

A

Passive Income - Rents, Royalties, Copyrights, Oil/Gas Leases, Patents

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12
Q

What types of entities flow through to Schedule E?

A

S Corps, Partnerships, Estates and Trusts

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13
Q

What are the adjustments to get to AGI? I EMBRACED Health & Farmers

A

Interest, Employment Tax, Moving Expenses, Business Expense, Rent/Royalty, Alimony, Contributions to Retirement, Early Withdrawal penalty from CD, Jury Duty pay, Health Savings Account, Farm Income

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14
Q

Adj to AGI - What is limit on interest?

A

Student Loan Interest is $2,500

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15
Q

Adj to AGI - What is limit on SE tax?

A

50% of SE Tax (7.65%) 100% of health insurance premiums

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16
Q

Adj to AGI - What are limits on Moving Expenses?

A

Military Only

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17
Q

Adj to AGI - What is business expense?

A

Schedule C - all costs of running a business

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18
Q

Adj to AGI - Rent, Royalty, and Flow Through?

A

Schedule E - Passive Activity, Losses up to Gains - carried forward indefinitely. Active Rental losses up to $25k. (AGI reduction)

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19
Q

Adj to AGI - What is the Alimony rule?

A

Deductible for agreements 2018 and prior, no longer included if 2019 and forward

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20
Q

Itemized Deductions - COmMITT

A

Charitable Contributions, Other Misc, Medical, Interest, Taxes, Theft or Casualty

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21
Q

Sch A - What is the medical/dental threshold?

A

over 7.5% AGI for 2018, 10% AGI for 2019

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22
Q

Sch A - What is the Interest limit?

A

Investment Interest (to extent of investment income Sch B) - unused carried forward indefinitely. Home mortgage interest - limit is 2 homes up to $750,000

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23
Q

Sch A - What is the taxes paid limit?

A

Limit is $10,000 - State and Local Taxes and Personal Property (Real Estate) Taxes OR Sales tax if living in a state with no property taxes

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24
Q

Sch A - What is the charitable contribution limit?

A

50% AGI total - 30% AGI for Property, 60% of AGI for Cash

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25
What is the limit in which you need a receipt?
$250 or larger
26
Can you carry forward charitable contributions?
Yes - Up to 5 years
27
Sch A - What are other misc. deductions?
Gambling Losses (no carryover),
28
What is the Theft or Casualty Loss limit?
Lower of decline in FMV or Adjusted Basis. 10% of AGI Threshold MINUS $100
29
What is Schedule 1?
Additional Income and Adjustments
30
What Schedules Flow to Schedule 1 - FOR AGI?
B, C, D, E, and F
31
What Schedule is From AGI?
Schedule A
32
Alternative Minimum Tax - PLIERS
Private Activity Bond Interest, Local & State Taxes, Incentive Stock Options, Excess Depreciation, Refunds of Local/State Taxes, Standard Deduction
33
AMT Tax Rate
26%
34
AMT Calculation
AMTI Before Exemption - AMT Exemption x 26% = Tentative Min Tax - Regular Tax = AMT Penalty Tax
35
Capital Loss Limits
$3,000 - remainder carried forward indefinitely ($1500 for MFS)
36
What is the Group Term Life Insurance taxable Limit?
Premiums over $50k are TFB
37
How do you calculate the taxable portion of Group Term Life?
Uniform cost/$1,000 x excess = taxable income
38
What is the Family Tax Credit (Child Tax Credit)?
$2,000 per child, Max $1,400 refundable
39
What is the rental real estate loss limit?
$25,000 for taxpayers with $100k or less income
40
When is a rental property considered home?
If personal use is greater of 14 days or 10% of days rented
41
Deadline for amended returns?
Form 1040X must be filed within 3 years
42
Deadline for IRA Contributions?
Original tax return due date
43
What are the limits on gains on the sale of a personal residence?
Up to $250k, $500k MFJ - excluded from gross income, Principle residence for 2 of last 5 years
44
What is the max amount a self employed person can deduct for Retirement Plan?
25% of Net Self Employment earnings BEFORE contribution
45
Is an S-Corp Stock Dividend Taxable?
No - adjusts basis in shares held
46
What are the limits for IRA contributions for someone over 50 yrs. old?
The lessor of 1) earned income or $6,500/yr ($5,500 + 1,000 catch up)
47
When can you deduct the entire amount of a passive activity loss?
When the interest in the partnership is disposed.
48
What dividends are NOT taxable?
Life insurance dividend (return of premium), Received from S-Corp, Stock dividends or stock splits on common stock, Liquidating Dividends
49
What is provisional Income?
Calculated by adding recipient's gross income, tax free interest, and 50% of SS benefits
50
Is Social Security benefits taxable?
It can be. 0% to 85% can be taxable depending on provisional income
51
What tax rate are short term capital gains taxed at?
Ordinary tax rates
52
What are Net Operating losses?
Could be from a business loss or casualty loss
53
What can you deduct for a Net Operating Loss?
If NOL is carried forward, deduction is limited to 80% of taxable income for year before NOL
54
Can you carry forward a Net Operating Loss?
Yes - indefinitely
55
When is a business considered a hobby?
If no profit in 3 out of 5 years, generally loss is not deductible
56
What is UNICAP? Section 263A
Uniform Capitalization Rules - Requires certain indirect costs to be capitalized to inventory produced or held for sale. $25 million Gross Receipts Test.
57
What are the qualifying child requirements?
JARRS - No Joint return, Age under 19 or 24 FT Student, Relationship - descendant, Residency - Must live with taxpayer more than half the year, Support - Child must not provide more than 50% of own support
58
What are the qualifying relative requirements?
C-IRS-Jack you - Citizen (US, Mexico, Canada), Income limit $4,150, Relative or unrelated but lived with you all year, Support - Taxpayer must provide over 50% of annual support, No joint return.
59
When are nonqualified stock options taxable?
When they are exercised.
60
What amount of an employee discount is taxable?
Employee discounts should not exceed 20%.
61
When is a qualified incentive stock option taxable?
When the stock obtained is sold.
62
Are guaranteed payments from a partnership subject to SE?
Yes - services performed
63
Is ordinary income from a S Corp subject to SE?
No - flow through income earned by S corp not presumably related to services.
64
When can you deduct all passive activity losses?
When you dispose of the interest (all losses including suspended losses may be taken)
65
What kind of investment expense can you offset with investment income?
Only investment income that is taxable (muni-bonds don't count)
66
Can spouses file a joint return if they have different accounting methods?
Yes - but they must have the same tax year.
67
What is considered when determining the cost of maintaining a home?
Food
68
How do you deduct losses from 1244 stock?
You treat them as ordinary losses, not capital losses
69
Are contributions to Roth IRA's deductible?
NO
70
Can an individual deduct taxes paid to a foreign country?
Yes - either as a itemized deduction or credit against federal taxes due

CPA Exam - REG (2 decks)

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