Deck 1 Flashcards
What is the minimum amount of self-employment income that requires filing a tax return?
What is the minimum amount of W-2 income?
$400
In excess of the personal exemption or standard deduction.
If alimony, prior to 2019, is set for a period of 10 years (or any other set amount of time) is it deductible?
No! It’s not alimony if it can extend beyond the life of the ex.
What is the recognized gain in a like-kind exchange?
The lesser of realized gain or boot rec’d.
If you’re basis is 50k, and your FMV is 100k, and you exchange for 75k FMV + 25k in cash, your realized gain is 50k, and your boot is 25k. You have to recognize 25k.
What is the recognized gain/loss if you exchange basis 100k, FMV 85K for FMV 75K + $10K?
Zero. Losses in like-kind exchanges aren’t recognized.
What is ‘revaluation’ in terms of currency?
Appreciation or increase.
What does Jensen’s alpha measure?
How an investor performs given the level of risk they took.
What is the formula for alimony recapture?
R3 = P1 + P2 - 2P3 - 37,500
Are things owned JTWROS included in gross estate?
Are previous gifts?
JTWROS items are includable.
Gifts with no gift tax paid are not.
What is the max a self-employed person can contribute to a 401k (counting employer contribution)?
Net SE income - 1/2 SE tax x .2 = max ER contribution
Add deferral limit and 50+ catch up provision
What would you fund a generation skipping trust with?
The lifetime exemption: $11,700,000
What is the principle of indemnity in insurance?
What type of insurance best supports it?
The insured should get exactly what they lost; no more, no less.
Actual cash value best reflects this.
What is the penalty for an organization deemed a personal holding company?
20% of undistributed income.
How long do you have to identify and close on a new property in a 1031 exchange?
45 days to identify, 180 to close.
Can you claim your spouse as a dependent?
No.
What are the 3 requirements to file an S. Corp?
- No more than 100 shareholders.
- No more than 1 class of stock.
- Shareholders must be citizens or resident aliens.
If you become disabled and are required to build an elevator in your house that costs $30k, and increases your home value by $10k, and your income is 30k, how do you calculate your medical expense deduction?
What if you have to build a ramp?
30k - .1(30k) = 27k
Ramp improvements to home value don’t need to be included, but ramps can be included as a medical expense.
If your basis in a building is 100k, FMV = 200k, it burns and you get insurance for 200k, but only spend 190k on a new building, do you have a capital gain?
Yes.
Are damages for bodily injuries excludable in gross income?
Are damages to your reputation and good name?
Yes—damages for bodily injuries are excludable.
No—damages to reputation are in the same category as punitive or pain and suffering damages; they must be included in gross income.
What is the maximum deduction for losses in active participant real estate?
Is there an AGI cap?
The maximum deduction in 1 year is 25k.
There is a MAGI cap of 100 to 150k. Deduct $1 from the 25K for every $2 you’re over the MAGI cap.
When can you not net LTCG w STCG?
When they’re both of the same sign; both positive or both negative.
If you rent your property for less than 15 days, is the income taxable?
No.
If you use your rental property for more than the greater of 14 days, or 10% of rental days, how is it taxed?
It’s mixed use property; it’s taxed by hobby loss rules:
- Report all income
- You can only claim expenses to the extent of income (the property cannot generate a loss)
What is the primary taxation difference between an S-Corp and a C-Corp?
S-Corps are taxed flow-thru to the owners.
C- Corps pay taxes in their own right.
Are assets in a testamentary trust subject to probate?
Yes, because the trust is established through the will, the assets must go through probate to get to the trust.
