Even Harder Level Subjects Flashcards
Form 1040 Flowchart
Gross Income Adjusted Gross Income Taxable Income Taxable Calculation Tax Liability Net Tax Due/Refund
Gross income inclusions (11)
Wages, salaries, tips Taxable interest Ord dividends Business income or loss Taxable Soc Sec Cap gains/losses IRA distributions Pensions and annuities Real estate income/loss Unemployment income Punitive damages
Adjustments for AGI (8)
IRA contributions Keogh or SEP 1/2 self-employment tax (0.07065) Alimony paid (pre 2019) self-employment health insurance $2500 student loan int Contributions to HSA Moving exp (active military only)
What’s on 1040 Schedule A
itemized deductions
What’s on 1040 Schedule B?
Taxable interest
What’s on 1040 Schedule C?
Business income or losses
What’s on 1040 Schedule D?
Capital gains and losses
What’s on 1040 Schedule E?
Real estate income/loss
How many filing statuses are there?
5 Single MFJ Head of Household MFS Qualifying widow(er)
Can a buy-sell agreement not be in writing or insured?
yes, it can, it can be a naked promise to pay or an installment sale
How many kinds of Limited Liability Companies are there?
two - LLC and LLP
What company form is an LLC?
a partnership
How does a limited liability company offer conduit taxation?
losses up to at risk basis (like partnership)
C Corp keys
Separate tax entity
DRD - 50% dividend-received deduction
PSC key (tax)
no graduated tax rates, flat 21%
Sole proprietorship keys
Pension Plan (Keogh) 100% of medical dental LTC insurance is deductible for owner
Partnership keys
Pension plan (Keogh)
100% medical dental LTC insurance deductile for owners
lack of continuity at death
losses up to basis
DEFN: Risk-free
limited or no liability exposure
DEFN: Risky
liability exposure
Limited Liability Corporation keys
limited liability (like a corp) losses up to basis (like a partnership)
Limited Partnership keys
Ltd partners cannot actively participate in business
Losses up to basis
Positives on buying a home vs. renting
tax deductions for interest and taxes
capital gains on sale
higher marginal tax bracket, great adv of ownership
Positives on renting vs. buying a home
rent lower, save money
no closing or maintenance costs
no long contract or obligation
QTP
qualified tuition plan
Education phaseouts (5)
EE bonds Coverdell Accts Lifetime Learning Credit American Opportunity Credit Education Loan Int Deduction
Highest possible 529 contribution per kid
$75,000 (5 yrs x 15k max contr)
Financing for Poorish (<60k) families
Pell Grants
Supplement Education Opportunity Grant
Subsidized Stafford Student Loans
AOC
$2500 per student for first 4 years
$160-180K MGI phaseout MFJ
Lifetime Learning Credit
$2000 max undergrad/grad
phaseout $118-138K magi MFJ
3 ways to finance graduate years
Fulbright Scholarship Stafford Loans
Section 529
Coverdell withdrawal (to 30)
Flowchart for Estate Tax (6 stages)
Gross Estate Adjusted Gross Estate Taxable Estate Tax Base Tentative Tax Net Estate Tax
What’s a synonym for DWR?
IRR
What’s arithmetic mean?
average
What’s time-weighted return?
geometric mean
How long carry forward?
Forever
oASDI
Old age, survivor, and disability insurance
MAGI
Add in Muni bond interest
ADP test
Actual deferral percentage
ACP test
Actual contribution percentage
How long can a donation over 60% of AGI be carried over?
5 yrs
How is a collectible donated for unrelated use valued in a donation?
use basis, not fair market value, unless it’s used related
What is a bargain sale?
Something sold at a discount to fair market value.
