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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
Q

What is the limit in which you need a receipt?

A

$250 or larger

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26
Q

Can you carry forward charitable contributions?

A

Yes - Up to 5 years

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27
Q

Sch A - What are other misc. deductions?

A

Gambling Losses (no carryover),

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28
Q

What is the Theft or Casualty Loss limit?

A

Lower of decline in FMV or Adjusted Basis. 10% of AGI Threshold MINUS $100

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29
Q

What is Schedule 1?

A

Additional Income and Adjustments

30
Q

What Schedules Flow to Schedule 1 - FOR AGI?

A

B, C, D, E, and F

31
Q

What Schedule is From AGI?

A

Schedule A

32
Q

Alternative Minimum Tax - PLIERS

A

Private Activity Bond Interest, Local & State Taxes, Incentive Stock Options, Excess Depreciation, Refunds of Local/State Taxes, Standard Deduction

33
Q

AMT Tax Rate

A

26%

34
Q

AMT Calculation

A

AMTI Before Exemption - AMT Exemption x 26% = Tentative Min Tax - Regular Tax = AMT Penalty Tax

35
Q

Capital Loss Limits

A

$3,000 - remainder carried forward indefinitely ($1500 for MFS)

36
Q

What is the Group Term Life Insurance taxable Limit?

A

Premiums over $50k are TFB

37
Q

How do you calculate the taxable portion of Group Term Life?

A

Uniform cost/$1,000 x excess = taxable income

38
Q

What is the Family Tax Credit (Child Tax Credit)?

A

$2,000 per child, Max $1,400 refundable

39
Q

What is the rental real estate loss limit?

A

$25,000 for taxpayers with $100k or less income

40
Q

When is a rental property considered home?

A

If personal use is greater of 14 days or 10% of days rented

41
Q

Deadline for amended returns?

A

Form 1040X must be filed within 3 years

42
Q

Deadline for IRA Contributions?

A

Original tax return due date

43
Q

What are the limits on gains on the sale of a personal residence?

A

Up to $250k, $500k MFJ - excluded from gross income, Principle residence for 2 of last 5 years

44
Q

What is the max amount a self employed person can deduct for Retirement Plan?

A

25% of Net Self Employment earnings BEFORE contribution

45
Q

Is an S-Corp Stock Dividend Taxable?

A

No - adjusts basis in shares held

46
Q

What are the limits for IRA contributions for someone over 50 yrs. old?

A

The lessor of 1) earned income or $6,500/yr ($5,500 + 1,000 catch up)

47
Q

When can you deduct the entire amount of a passive activity loss?

A

When the interest in the partnership is disposed.

48
Q

What dividends are NOT taxable?

A

Life insurance dividend (return of premium), Received from S-Corp, Stock dividends or stock splits on common stock, Liquidating Dividends

49
Q

What is provisional Income?

A

Calculated by adding recipient’s gross income, tax free interest, and 50% of SS benefits

50
Q

Is Social Security benefits taxable?

A

It can be. 0% to 85% can be taxable depending on provisional income

51
Q

What tax rate are short term capital gains taxed at?

A

Ordinary tax rates

52
Q

What are Net Operating losses?

A

Could be from a business loss or casualty loss

53
Q

What can you deduct for a Net Operating Loss?

A

If NOL is carried forward, deduction is limited to 80% of taxable income for year before NOL

54
Q

Can you carry forward a Net Operating Loss?

A

Yes - indefinitely

55
Q

When is a business considered a hobby?

A

If no profit in 3 out of 5 years, generally loss is not deductible

56
Q

What is UNICAP? Section 263A

A

Uniform Capitalization Rules - Requires certain indirect costs to be capitalized to inventory produced or held for sale. $25 million Gross Receipts Test.

57
Q

What are the qualifying child requirements?

A

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
Q

What are the qualifying relative requirements?

A

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
Q

When are nonqualified stock options taxable?

A

When they are exercised.

60
Q

What amount of an employee discount is taxable?

A

Employee discounts should not exceed 20%.

61
Q

When is a qualified incentive stock option taxable?

A

When the stock obtained is sold.

62
Q

Are guaranteed payments from a partnership subject to SE?

A

Yes - services performed

63
Q

Is ordinary income from a S Corp subject to SE?

A

No - flow through income earned by S corp not presumably related to services.

64
Q

When can you deduct all passive activity losses?

A

When you dispose of the interest (all losses including suspended losses may be taken)

65
Q

What kind of investment expense can you offset with investment income?

A

Only investment income that is taxable (muni-bonds don’t count)

66
Q

Can spouses file a joint return if they have different accounting methods?

A

Yes - but they must have the same tax year.

67
Q

What is considered when determining the cost of maintaining a home?

A

Food

68
Q

How do you deduct losses from 1244 stock?

A

You treat them as ordinary losses, not capital losses

69
Q

Are contributions to Roth IRA’s deductible?

A

NO

70
Q

Can an individual deduct taxes paid to a foreign country?

A

Yes - either as a itemized deduction or credit against federal taxes due

CPA Exam - REG (2 decks)

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