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accounting > ARE- Fed Taxes- Individuals > Flashcards

ARE- Fed Taxes- Individuals Flashcards

1
Q

IS ALIMONY TAXABLE

A

YES ( CHILD SUPPORT PAYMENTS ARE NOT)

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2
Q

IS UNEMPLOYMENT COMPENSATION TAXABLE

A

YES

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3
Q

what is the maximum amount of social security benefits that may be taxed

A

85%

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4
Q

may gambling winnings be netted against gambling losses

A

NO winnings are reported on form 1040 losses are reported on Schedule A ( miscellaneous deductions not subject to 2%)

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5
Q

If you remit your jury duty pay to your employer how should the pay be treated

A

included as income and deducted to arrive at AGI

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6
Q

Is a tax refund from a local government taxable if the federal standard deduction was taken in the year from which the refund stems

A

NO ( only if the itemized deduction was taken and subject to the tax-benefit rule.)

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7
Q

If you chose to receive a stock dividend instead of cash, is the dividend taxable?

A

Yes, (if there was no choice, stock dividends are not taxable)

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8
Q

Are lump-sum life insurance proceeds taxable

A

No

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9
Q

are punitive damages taxable

A

Yes

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10
Q

If an employer fully funded a pension, how much of the distribution is taxable

A

The full amount

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11
Q

what are the requirements for a scholarship to be excluded from income

A

Matriculated (degree=Seeking) student

Money is used for tuition, books, and supplies

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12
Q

how much tax-free life insurance may an employer provide to an employee

A

$50,000

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13
Q

What are the requirements for Series EE Us Savings bon interest to be excluded?

A

Purchaser at least age 24
purchased after 1989
Proceeds used for higher education of self, spouse, dependents

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14
Q

Is the rent generated from an inherited building taxable?

A

Yes ( but the receipt of the building is not taxable)

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15
Q

Is employer-Provided educational assistance for graduate school generally taxable?

A

Yes ( there is a $5,250 exclusion for other -than-graduate-school education) check current regs??

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16
Q

How much may be contributed to a regular IRA

A

the smaller of earned income (inclusive of alimony received or $2000) see current regulations

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17
Q

What determines the deductibility of an IRA

A

Whether or not the taxpayer is covered by a pension plan ( and a possible AGI limitation)

18
Q

what passive activity loss ( subject to an AGI phase-out) may be used to offset non-passive activity income?

A

Rental real estate activity of an actively participating 10% owner

19
Q

What is the AGI floor for qualifying medical expenses?

A

Only what exceeds 10% of AGI 7.5% if either spouse is over 65

20
Q

What taxes are considered itemized deductions?

A

State and local income taxes
Real estate taxes
personal property taxes

21
Q

what interest payments are considered itemized deductions?

A 
Mortgage interest (inclusive of points)
Investment interest (only used to offset net investment income)
22
Q

What is the AGI limit on contributions as an itemized deduction?

A

50% (except for long-term capital gain property, which is 30%)

23
Q

What is the carryover period for charitable contributions taken as itemized deductions?

A

5 years

24
Q

what is the general formula for casualty ant theft losses taken as an itemized deduction?

A

loss less insurance less $100 less 10% of AGI

25
Q

what is the limit on meals and entertainment before any AGI threshold?

A

50%

26
Q

What is a capital asset?

A

Any property held for personal or investment purposes ( other than inventory, receivables, and certain types of assets eligible for Section 1231 treatment)

27
Q

In a like-kind exchange, what amount of gain is taxable?

A

Only gain to the extent of “boot” (cash and other property received, and liabilities assumed by the other side)

28
Q

What is the holding period for property acquired from a decedent?

A

Always long-term

29
Q

What is the maximum exclusion for a married couple who sell their residence after May 6, 1997?

A

$500,000

30
Q

True or False?

In-Laws are not related parties: therefore, a loss on the sale of property to an in-law is deductible.

A

True

31
Q

True or False?

Property held for lease to others is 1231 property?

A

True

32
Q

What is the maximum amount of an individual’s capital losses that may be offset against ordinary income?

A

$3000 $1500 if you’re married filing separate return. You can use your total net losses to reduce income dollar for dollar up to 3000

33
Q

What are the five tests of dependency?

A
  1. Gross income
  2. Support
  3. Relationship
  4. Citizenship
  5. No joint return
34
Q

How long may Qualifying widow(er) status be used?

A

For the two years after spouse’s death

35
Q

Who are entitled to increased standard deductions?

A

Persons who are legally blind, or 65 or older ( and who do not itemize deductions)

36
Q

True or False?

Earned income credit is refundable.

A

True

37
Q

True or False?

Alternative minimum tax (ATM) is a substitute for regular tax.

A

False

it is in addition to regular tax

38
Q

True or False?

Excess social security withheld by one employer may be claimed as a credit on the tax return.

A

False

the employee must request that employer return the excess

39
Q

What amount of adoption assistance credit is generally available?

A

$5000. $12970 in 2013 for qualified expenses

40
Q

What is the minimum tax credit used to offset?

A

Future regular tax liability

accounting (9 decks)

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