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HS321 > Chapter 10 – Capital Gains And Losses And AMT > Flashcards

Chapter 10 – Capital Gains And Losses And AMT Flashcards

1
Q

A capital asset is any asset other than these 4 items.

A
  1. Accounts and Notes Receivable
  2. Copyrights/Creative Work
  3. Inventory (Stock In Trade)
  4. Depreciated real and personal property

ACID

ACI is Ordinary
D is Section 1231

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2
Q

The determination of whether a capital gain is short-term or long-term is important for individuals not for…

A

corporate tax papers.

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3
Q

In order for you to experience a capital gain or loss, there are must be a…

A

sale or exchange of some type of property.

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4
Q

Gain on a capital asset will be considered short-term gain if the property was held for…

A

one year or less.

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5
Q

Gain on the sale of a short-term capital is taxed at…

A

ordinary rates.

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6
Q

Long-term capital gain rates are taxed…

A

more favorable.

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7
Q

A gain on a capital asset will be considered long-term gain if the property was held for…

A

more than 1 year.

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8
Q

Real estate is taxed at a rate of ____%.

A

25%

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9
Q

Collectibles are taxed at a rate of ____%.

A

28%

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10
Q

Most longterm capital assets are taxed at a rate of ____%.

A

15%

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11
Q

Capital gains can be deducted in full against…

A

capital losses.

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12
Q

Net capital losses can be deducted against ordinary income up to $_________.

A

$3,000

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13
Q

If you aren’t able to deduct capital losses during the current tax year, then you can have them…

A

carried forward to the following years indefinitely.

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14
Q

The gain on the sale of a capital asset is taxed at…

A

ordinary rates.

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15
Q

Losses on the sale of a capital asset is fully deductible and is not subject to…

A

the $3000 limit.

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16
Q

Capital asset gains are taxed at __________ rates.

A

non-favorable

17
Q

Capital asset losses are taxed at __________ rates.

A

favorable

18
Q

Section 1231 assets (depreciable property) will always be taxed at favorable rates for both…

A

losses and gains.

19
Q

Section 1231 property is what type of property?

A

depreciable

20
Q

Section 1231 property must be held for more than 1 year and used for _____________ purposes.

A

business

21
Q

If a Section 1231 property loss exceeds the gain, then entire net loss is treated as a ____________.

A

capital loss

22
Q

If a Section 1231 property gain exceeds the loss, then entire net gain is treated as a ____________.

A

capital gain

23
Q

The alternative minimum tax applies to 4 groups. Who are they?

A

C-corporations
individuals
trust
estates,

24
Q

The alternative minimum tax is imposed on individual tax payers at a rate of _______%.

A

26-28%

25
Q

Name the 8 adjustments that are taken out for AMT calculations.

A 
itemized deductions
standard deduction
medical over 10% of AGI
depreciation (MACRS)
stock options
exemptions/expenditures
interest on non-governmental bonds (private activity bonds; airport/stadium)
state and real property taxes
26
Q

True or false. AMT exception amount is the exact same for individuals as it is for corporations.

A

False

27
Q

AMT exemptions can be used for both…

A

individuals and corporations.

28
Q

AMT exemptions can ___________ the alternative minimum tax amount.

A

reduce

29
Q

What are the 5 tax credits that are not taken out for AMT?

FACBC

A 
Foreign tax credit
Adoption credit
Child tax credit
Business energy credits
Charity Contributions
30
Q

The corporate AMT rate is a flat ____%.

A

20%

31
Q

Corporations are the only ones who have a special ______ adjustment.

A

ACE

32
Q

How much income does a small corporation have to average for the first three taxable years to be considered a small corporation?

A

$5,000,000

33
Q

Do small or large corporations pay AMT?

A

Large corporations ONLY!!

34
Q

Is the interest paid on a savings account considered an adjustment when you calculate your AMT?

A

No

35
Q

When calculating AMT, the exemption amount is eventually phased out for…

A

higher income taxpayers.

HS321 (14 decks)

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