CLASSIFICATION OF AGENTS & PRINCIPALS Flashcards
Person who agrees to act as an agent without expectation of compensation
Gratuitous Agent
An agent who is authorized to do a series of transactions for the principal for a continuing period of time and more implied authority
General Agent
An agent who conducts some specific transaction for the principal over a limited period of time and has less implied authority
Special Agent
Example of special agent
Broker;Factor;Lawyer;Auctioneer
Factor is sometimes called
commission merchant
Receives possession of some other person’s property to sell for a commission
Factor
Person who agrees to act as an agent with expectation of compensation
Compensated Agent
Person appointed by an authorized agent to act for the agent
Subagent
A person whose existence and identity are known to the third party at the time of making the contract with the agent
Disclosed Principal
Same as implied authority
Incidental authority
Combination of express and implied authority
Actual Authority
Another term for apparent authority
Ostensible authority
Is a legally enforceable agreement
Contract
A promise exchange for an act
Unilateral Contract
Interdependent promises that cannot be separated
Indivisible Contract
What are the four elements of a contract
Agreement;Consideration;Legal purpose;Competent parties
Offer + acceptance =
mutual assent
Request to change the taxpayer’s tax year must be filed on
IRS Form 1128
Accrual method must be used by:
C corporation
Partnership that has C corporation as a partner
Tax shelter
All items included in inventory s/b valued at either:
- Cost
2. Lower of cost or method
Unless a taxpayer uses the LIFO method, inventories may be valued at the
Lower of cost or method
Taxpayer using the LIFO method is required to value inventory at
Cost
The 2nd most important source of administrative tax authority is
Revenue rulings
Easier to challenge in court
Revenue rulings
While growing in the ground the tree is
Real property
When the tree growing in the ground is cut into firewood it becomes
Personal property
Conversion from real to personal property is called
Severance
Conversion from personal property to real property is called
Attachment
For federal tax purposes, all property is either classified as:
Ordinary income property or as capital asset
Passive losses cannot be used for
Active Income such as Wages, Salaries
Portfolio Income such as Dividend, interest, royalties, annuities
