Chapter 2 Flashcards
Directors Fees are considered
Self-Employment Income
Gains from the sale of livestock used for hauling, dairy breeding or sporting purposes generally result in capital gains and….
are not reported on schedule F but rather Form 4797
The gain from sales caused by a drought, flood or other weather related condition can be postponed for up to _____ years
4
Crop insurance and disaster payment are generally ________ the year it is recieved
included in income
A taxpayer qualifies as a farmer by receiving at least _____ or the total gross income from farming in the current year
2/3
Farmers must pay all estimated taxes by…..
Jan 15 and file the 1040 return and pay any additional taxes by April 15th
Section 1244 Stock
Stock of a small business (common or preferred, voting or nonvoting) corporation held since its issuance and issued for money or other property (not other stocks or securities)
Up to $________ of loss realized on disposition or worthlessness of 1244 stock is treated as an ordinary loss
50k or 100k jointly
Up to $50k ($100k jointly) of loss realized on disposition or worthlessness of 1244 stock is treated as
ordinary loss
To qualify as a small business corporation for 1244 stock
the aggregate amount of money and other property received by the corporation for stock as a contribution to capital and as pain in surplus cannot exceed $1 Million.
If paid in capital exceeds 1 million only part of the stock would qalify
When an owner of 1244 stock makes an additional capital contribution but does not receive any additional shares of stock
the additional investment cost is added to the basis of the previously held stock but does NOT qualify for the 1244 ordinary loss treatment
Section 1244 stock cannot be used for ordinary loss benefit if
gifted to them
Section 1202 Stock purchased between Feb. 18, 2009- Sept. 27, 2010
gain from the sale is 75% excluded
Stock qualified as a Section 1202 stock if…
- received after Aug 10, 1993
- Held by the taxpayer for over 5 years
- The seller is the original owner of the stock
- The corporation is a domestic C corporation
- the corporations gross assets do not exceed $50 million at the time the stock was issued
If there is an exchange of like-kind property in which you also give ______ and the exchange results in a loss- you are unable to deduct the loss.
Cash
If there is an exchange of like-kind property in which you also give cash and the exchange results in a loss- you ARE / ARE NOT able to deduct the loss.
Are not
Holding period for like kind exchanges between related parties
2 years
If at least 2/3rds of your gross income was from farming two years in a row _____ estimated tax payment is required
one
The estimated tax payment for a qualifiying farmer is
the smaller of 2/3 your total tax for the current year or 100% of your taxes from the previous year
Receipt of agricultural program payments by a farmer for refraining from growing crops should be reported as….
Farm Income, not subject to self-employment tax
Bad debts recovered by an individual under the accrual method should be….
reported as other income in the current year
Partnership interests CAN or CAN NOT qualify for the like kind exchange?
Can Not
