Chapter 1

Question 1

Who qualifys for a qualifying child?

Answer 1

CARES
Close relative
Age limit (19/24)
Residency and filing req (more than 1/2 yr)
Eliminate gross inc test
Support test changes (child did not contribute 2 more than 1/2)

Question 2

Who qualifies as a qualifying relative?

Answer 2

SUPORT
Support (taxpayer must supplt more than 1/2)
Under specific amt of gross inc (exemption 4,000)
Precludes dependent filing joint return
Only citizens (and residents of US, Mexico, Canada)
Relative test OR
Taxpayer lives w individual the whole yr (if non relative)

Question 3

Whats the 2015 exemption

Answer 3

4000

Question 4

When are premiums to life insurance paid by company taxable?

Answer 4

Above 50,000

Question 5

When is employer paying for education excludable after tax?

Answer 5

Up to $5,250

Question 6

What is kiddie tax?

Answer 6

unearned income by child under 18 (or 24) taxed at parents rate

Question 7

What are the 2015 tax rates for qualified dividend and LTCG

Answer 7

0% low income
15% most taxpayers
20% high income taxpayers

Question 8

What happens if you take an early withdrawal from an IRA, and what is early? Any exemptions?

Answer 8

penalty of 10% and before 59 1/2.
Exemption: HIM DEAD
Home buyer
Insurance
Medical
Disability
Education
And
Death

Question 9

When is rent excludable income and how do you account for rent when its not? Loss allowed?

Answer 9

Excludable - rent less than 15 days
Includable prorated if rent 15 or more days
No loss allowed if used for personal for more than 14 days OR more than 10% of rental

Question 10

Whats the Mom and Pop Exception?

• definition
• amount
• phaseout

Answer 10

may deduct up to 25,000 per yr of net passive losses related to rental real estate if taxpayer is active in managing and own more than 10%.

exception is phased out over AGI of 100,000 through 150,000

Question 11

How do you treat social security income?

Answer 11

• Low income: not taxable if inc is below 25,000 (MFJ 32,000)
• upper income: 85% of SS is taxable income over 35,000 (MFJ 44,000)

Question 12

When can an award be excluded from gross income?

Answer 12

1. The winner is selected for the award without entering into a contest.
2. The winner directly assigns the award to a governmental unit or charitable organization right away