Chapter 7 Homework Notes Flashcards
Non business Loss Limits
Deducted against capital gains, but is limited to 3000 on ordinary income
Bad Debt Loss on receivables
Limited to the basis. Only the excess debt is bad debt
Gain on 1244 stock
Treated as a capital gain
Loss on 1244 stock
Limited to 50000, 100000 for a joint couple against ordinary income. Any excess is treated as a capital loss and limited by the 3000 against ordinary income, but not against capital gains
Miscellaneous Itemized Deductions
You minus out two percent of AGI and deduct the excess as misc itemized deductions
Domestic Production Activities Deduction
9% of the lesser of QPAI or adjusted income, It is limited to 50% of the W-2 paid by the taxpayer during the current year
Ch 8
yup
MACRS 1/2 year convention
is incorporated into the tables. if you sell it before the depreciation term is up then you must multiply your cost recovery by .5
Mid-Quarter Convention
If 40% of ALL property placed in service during the year, excluding real estate is put in service in the 4th quarter then you use the mid quarter convention
Non Residential Property with the mid month convention
the table is all inclusive. you don’t have to calculate it for every month. whatever month it was put in service, just use the table rate for the whole year
Limit on special vehicles over a rating of 6000-14000 lbs
25000 on the 179 deduction
Items included as moving expenses
moving household goods and personal effects
traveling from the former residence to the new place of residence
mileage for personal autos, .23 per mile
Tuition for AGI
limited to 4000 depending on your income range. Books, lodging, and meals and other fees are not included
Meals from AGI
limited to 50%, unless the job is regulated by the government then you deduct 80% of the meals
Automatic mileage method
multiplies mileage by .555
Standard education deduction
250 for all teachers
Traditional IRA contribution by the person
5000
simplified employee pension plan contribution limit by the individual
lesser of 5000 or 100% of earned income, this does not include the employers contributions
when reimbursed you must find the % that relates to meals and entertainment
yup
Losses are not subject to the 2% rule
true
a. DFOR. p. 9-14
b. DFROM. p. 9-38
c. DFROM. p. 9-26
d. Not deductible. p. 9-7
e. Not deductible. p. 9-41
f. DFROM. p. 9-38
g. Not deductible. p. 9-30
h. DFOR. pp. 9-4 and 9-5
i. DFROM. p. 9-26
j. Not deductible. pp. 9-15 and 9-16
a. Moving expense of an employee ______ ______ ______
b. Tax return preparation fee incurred
by an employed plumber ______ ______ ______
c. Safety glasses purchased by an
employed pipefitter ______ ______ ______
d. Dues to auto club (e.g., AAA) for
taxpayer who uses the automatic
mileage method ______ ______ ______
e. Nursing refresher course for
taxpayer who retired from nursing
five years ago ______ ______ ______
f. Gambling loss not in excess of
gambling gain by a self-employed
architect ______ ______ ______
g. Contribution to Roth IRA by a selfemployed
attorney
h. Business travel expenses by a
statutory employee ______ ______ ______
i. Job hunting expense by an
elementary school teacher seeking a
position as an elementary school
principal ______ ______ ______
j. Cost of bar exam review course
taken by a recent law school
graduate
true
medical expenses
anything in excess of the 7.5% of AGI rule
tuition as a medical expense
can be if the school is a special shcool
transportation is deductible as a medical expense when
it is to and from point of treatment
Lodging as a medical expense
you can deduct a max of 50 per night per person and as the long as the lodging is for medical use primarily
medical insurance premiums paid by a self employed tax payer are deductible as medical expenses(for AGI)
true
limit on long term care plan
4370 for 70 yr old and 350 for age 40
medial expenses are deducted in the year paid
true
acquisition interest limit
500000 per person
home equity interest
interest is deductible on the portion that doesnt exceed the lesser
FMV of the residence
or
50000 per person