Deck 37 Flashcards
Capital expenditure for the improvement of a home is deductible to the extent that:
The expenditure exceeds the increase in the value of the home (Difference between improvement and cost)
Accumulated earnings tax can be imposed regardless of:
The number of stockholders in a corporation
An option held by an investor is considered what kind of asset:
Capital asset
The cost of worthless stock or securities is treated as:
A capital loss as if they were sold on the last day of the taxable year
A holder in due course is only subject to what kind of defenses:
Real defenses (fraud in the execution, insolvency, and infancy are real defenses). Breach of contract is not a real defense
In filing a consolidated federal income tax return, a corporate group eliminates:
Dividends
For a corporation, a net long-term capital loss is not deductible in the:
Current year (carry back 3 and forward 5 years)
2015 maximum allowable 179 deduction
$25,000
Goods sold for over $500 do not have to be in writing if the following take place:
SWAP (Specialty manufactured goods, written confirmation, admitted in court, and performed)
American opportunity credit calculation =
First $2,000 + 25% of the next amount up to $2000
Lifetime learning credit =
20% of qualified expenses up to $10,000
What qualifies as a like-kind exchange?
Investment land for building to be used in a trade or business
General advertising is prohibited in under what rules:
Regulation D 505 and 506
How does a return of capital effect basis?
Reduces shareholders basis
What kind of income is not considered personal holding company income?
Bonuses
Non qualified stock is recognized as:
Ordinary income
Complex trust
Distribute principal
Building is subject to a mortgage that is assumed by the partnership, how is the partners interest affected?
The basis is reduced by the liabilities assumed by the other partners
A seller is entitled to recover the full contract price from the buyer when the:
Goods are destroyed while the risk of loss is with the buyer
A reorganization plan under Ch. 11 will not be approved unless the plan provides for:
The full payment of administration expenses
Preferential payment is:
1) transfer made to or for the benefit of a creditor; 2) on account of an antecedent debt; 3) Made within 90 days prior to the filing of a petition; and 4) results in the creditor receiving more than the creditor would have received under the bankruptcy code
Immediately upon filing of a petition in bankruptcy, creditors are:
Stopped from pursuing collection actions against the debtor (automatic stay)
What kind of income is subject to self-employment tax?
Earned compensation (guaranteed payments, not ordinary income from an S Corp.)
When a tax return has not been filed, any claim for refund must be made within:
2 years from the time the tax was paid
A taxpayer can file a claim for refund by the later of:
3 years from the time the return was filed, 3 years from the original due date of the return, or two years from the time the tax was paid
Corporations basis =
Carryover + any cash paid (doesn’t include mortgages)
The value of a partnership interest acquired for services rendered is:
Ordinary income to the partner (at FMV)
In a liquidating distribution, we have to:
Zero out to get out (Even if the items value is less than what it would be to zero out)
