EA Part 2 Flashcards
Form 8832
entity classification election
what kind of entity is LLC for federal taxes
as a partnership
Form 1065
partnership INFORMATIONAL return
Form 1120
Corporation Tax return
Form 1128
To adapt, change, retain a tax year
What are the 4 acct methonds
cash, accrual, special, hybrid
Form 3115
Application for change in accounting method
When can accrual count a payment/expense made to cash basis?
when payment is made AND recorded (corresponding amount is includible in the related person’s gross income)
Inventory Methods
LIFO
FIFO,
Specific Identification Method
COST
Valuing Inventory methods
Retail
lower of cost or market
Cost
Rolling Average Method
will be deemed to clearly reflect income if:
recomputes
-Each time the taxpayer purchases or produces an additional unit
-On a regular basis, but no less frequently than once per month; and
AND
The variance percentage does NOT exceed 1%
OR
The entire inventory of business turns at least four times per year, as determined under Section 4.03 of the Revenue Procedure.
1250 (real estate property)
1245 (personal propery = business property)
Real Estate Property (1250 Gain is EXCESS depression taken)
Business Property
Like kind exchange/basis
REDUCED by: money received and loss
INCREASED by: money gave and gain
Form 4562
Depreciation and Amoritization
vehicle placed in service
1 st depreciation, 179, MACRS is $11,160 (3,160 if elected not to claim special depreciation allowance)
Form 4797
Recapture of 179 / Sale of Business property
Section 197 intanglibles
15 yr amoritization
Section 1231 (gain or loss)
Gain or Loss or depreciable business property held for more than 1 yr (capital tax rates)
Taxable gain in exchage
cash, mortgage, FMV of unlike property
Depreciation and amortization recaptured as what income?
ordinary income
Section 1031
Like-kind exchange (non taxable gain and loss) unless cash, debt releph, or FMV of unlike property.
Form 8824
Like-kind exchange even if no gain or loss
related parties how treat loss and gain
no loss allowed and ALL gain as ordinary income (unless complete liquidation of a corporation)
If property is condemned how is gain recorded?
taxpayer can postpone reporting gain (or part of a gain) from a condemnation if the taxpayer buys replacement property.
Small business stock
ordinary loss of ($50k per taxpayer or $ 100k for joint return) over $100k loss is capital loss
GAIN is CAPITAL
Stock from domestic S or C corp *small business
Form 8949
Sales and Other Dispositions of Capital Assets (non business bad debt,
activity carried on for profit if…
produced profit 3 of 5 yrs
golden parachute
3 times
Travel outside US for Buisness must meet ONE or 4 requirements
- less than 25% on personal activities.
- Vacation was not a major consideration.
- outside the U.S. no more than a week. In counting the days, do not count the day the taxpayer leaves the United States, but do count the day he returns to the United States.
- Had no substantial control over the trip.
Business Trip on Cruise ship how much can you DEDUCT each year
$2000
For $25 gift limit
spouses are treated as ONE taxpayer
partnership and partner treated as ONE taxpayer
Form 8829
Expenses for Business Use of Your Home
Limit on entertainment facility
Generally, taxpayer CANNOT deduct any expense for the use of an entertainment facility. This includes expenses for depreciation and operating costs such as rent, utilities, maintenance, and protection.
Form SS-8
Determination of Worker Status for Purposes
of Federal Employment Taxes and
Income Tax Withholding
employers are responsible to report federal income taxes, Social Security taxes, and Medicare taxes on Form
Form 941. In general, employers are responsible to report federal income taxes, Social Security taxes, and Medicare taxes on Form 941, Employer’s Quarterly Federal Tax Return.
Form 943, Employer’s Annual Federal Tax Return for Agriculture Employees is used by farm employers. Employers who have an employment tax liability of $1,000 or less for the year may file Form 944, Employer’s Annual Federal Tax Return instead of Form 941, Employer’s Quarterly Federal Tax Return. Use Form 945 to report withheld federal income tax from nonpayroll payments.
If an employee is reimbursed for business expenses through a nonaccountable plan
, the employer is REQUIRED to withhold federal income tax, and the expense reimbursement amount is taxable for both Social Security and for Medicare.
key employee is
- An officer having annual pay of more than $170,000
- An employee was either of the following:
- A 5% owner of the business
- A 1% owner of the business whose annual pay was more than $150,000
De Minimus is never
cash
Archer Medical Savings Account (MSAs
The interest or other earnings on the assets in the MSA are tax-free.
The contributions remain in the MSA from year to year until the employee uses them.
The employee can claim a tax deduction for contributions he makes even if he does NOT itemize deductions on Form 1040.
An Archer MSA is “portable” so it stays with the employee if he changes employers or leaves the work force.
Form 3800
General Business Credit (all business credits must be reported on this form)
Investment Credit (Form 3468)
The investment credit is the total of the following credits:
Energy credit
Qualifying advanced coal project credit
Rehabilitation credit
Qualifying gasification project credit
Qualifying advanced energy project credit
The Qualifying therapeutic discovery project credit has expired.
Form 8882
The employer applies for the credit on Form 8882, Credit for Employer-Provided Child Care Facilities and Services.
The credit allows for 25% of qualified expenses paid for employee childcare.
The credit allows for 10% of qualified expenses paid for childcare resource and referral services.
Director income of a Corp is
Self Employed, must pay SE taxes
Limited partners share of earnings
are generally not SE income
farm income averaging for how many yrs
3 yrs. nursery or sod(grass farm) Schedule J
which will not qualify for 501(3)C
Individual or partnership
Form 1023
Form 1024
Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the IRC
Form 1024, Application for Recognition of Exemption Under Section 501(a)
which form can’t be efiled
Form 990-T, Exempt Organization Business Tax Return
Form 8283 must be filed if
Noncash Charitable Contributions if $5000 or more non cash contribution
Form 8282
donee information return
- must file if sold, transferred property within 3 yrs and its cost is $500 or more.
