Deck 6 Flashcards
If your return is 60+ days late, what is your IRS penalty?
The lesser of $435 or amount of tax due.
When does the clock start for failure to file and failure to pay penalties?
When does the 2nd month begin?
April 15. The second month begins on May 15
Are un-reimbursed employee business expenses deductible?
No. Not since the TCJA of 2017.
Can a taxpayer deduct loss property at basis?
NO! Loss property can only be deducted at FMV.
What is the valuation for short-term gain investment property donated to a charity: basis or FMV?
Donated ST gain property is valued at the lesser of adjusted basis or FMV.
How are charitable contributions of real property valued?
FMV
Can you take an itemized deduction if you travel and stay in a hotel to get medical treatments?
Yes! .16/mile, and $50 PER PERSON per night in hotel.
Are union dues or job hunting expenses deductible?
No!
What is the max. Itemized deduction for state, real estate, or sales taxes?
10k
When can you take a deduction on damage to a business asset for which you received an insurance settlement?
When net insurance (ie, settlement less deductible) proceeds are less than adjusted basis.
Does non-prescription insulin qualify for a medical expense deduction?
Yes!
Can you deduct medical expenses for someone who would be a dependent except they have their own income?
Yes. Very special exception.
What is the limit on deducting investment interest expense? What happens if there’s excessive interest expense not deducted?
Investment interest expense is limited by investment income. Excess interest not deducted can be carried over.
Can you deduct interest used to purchase a tax exempt investment?
No!
Does participation in a SEP limit your ability to contribute to an IRA?
Yes.
When calculating the allowable contribution to an IRA of a participant in a qualified plan, how do you incorporate the 50+ additional contribution?
Add it to the 6k from which you deduct the appropriate amount.
Do top-heavy rules apply to SEP’s? Can they integrate with SS?
Yes and yes.
Is a stock redemption plan the same thing as an entity purchase agreement?
Yes.
What is split dollar life insurance? What can it be used for?
Employer and employee share premium costs and death benefit. This can be used to fund a stock redemption, employer purchase agreement.
Are insurance premiums to fund buy-sell agreements tax deductible?
No. Both cross purchase and entity purchase agreements are not tax deductible.
What definition does SS use for disability benefits?
Any occupation—once you’re SS disabled you’re probably never going to work again.
What are ADR’s (American Depository Receipts) for?
To allow US investors to purchase foreign securities.
When must you purchase stock to get its dividend?
One day before the ex-dividend date, two days before the date of record. Whoever owns the stock at dawn on the ex-dividend date gets the dividend.
Does dollar weighted return = IRR?
Yes!
