Even Harder Level Subjects

Question 1

Form 1040 Flowchart

Answer 1

Gross Income
Adjusted Gross Income
Taxable Income
Taxable Calculation
Tax Liability
Net Tax Due/Refund

Question 2

Gross income inclusions (11)

Answer 2

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

Question 3

Adjustments for AGI (8)

Answer 3

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)

Question 4

What’s on 1040 Schedule A

Answer 4

itemized deductions

Question 5

What’s on 1040 Schedule B?

Answer 5

Taxable interest

Question 6

What’s on 1040 Schedule C?

Answer 6

Business income or losses

Question 7

What’s on 1040 Schedule D?

Answer 7

Capital gains and losses

Question 8

What’s on 1040 Schedule E?

Answer 8

Real estate income/loss

Question 9

How many filing statuses are there?

Answer 9

5
Single
MFJ
Head of Household
MFS
Qualifying widow(er)

Question 10

Can a buy-sell agreement not be in writing or insured?

Answer 10

yes, it can, it can be a naked promise to pay or an installment sale

Question 11

How many kinds of Limited Liability Companies are there?

Answer 11

two - LLC and LLP

Question 12

What company form is an LLC?

Answer 12

a partnership

Question 13

How does a limited liability company offer conduit taxation?

Answer 13

losses up to at risk basis (like partnership)

Question 14

C Corp keys

Answer 14

Separate tax entity

DRD - 50% dividend-received deduction

Question 15

PSC key (tax)

Answer 15

no graduated tax rates, flat 21%

Question 16

Sole proprietorship keys

Answer 16

Pension Plan (Keogh)
100% of medical dental LTC insurance is deductible for owner

Question 17

Partnership keys

Answer 17

Pension plan (Keogh)
100% medical dental LTC insurance deductile for owners
lack of continuity at death
losses up to basis

Question 18

DEFN: Risk-free

Answer 18

limited or no liability exposure

Question 19

DEFN: Risky

Answer 19

liability exposure

Question 20

Limited Liability Corporation keys

Answer 20

limited liability (like a corp)
losses up to basis (like a partnership)

Question 21

Limited Partnership keys

Answer 21

Ltd partners cannot actively participate in business

Losses up to basis

Question 22

Positives on buying a home vs. renting

Answer 22

tax deductions for interest and taxes
capital gains on sale
higher marginal tax bracket, great adv of ownership

Question 23

Positives on renting vs. buying a home

Answer 23

rent lower, save money
no closing or maintenance costs
no long contract or obligation

Question 24

QTP

Answer 24

qualified tuition plan

Question 25

Education phaseouts (5)

Answer 25

``` EE bonds Coverdell Accts Lifetime Learning Credit American Opportunity Credit Education Loan Int Deduction ```

Question 26

Highest possible 529 contribution per kid

Answer 26

$75,000 (5 yrs x 15k max contr)

Question 27

Financing for Poorish (<60k) families

Answer 27

Pell Grants Supplement Education Opportunity Grant Subsidized Stafford Student Loans

Question 28

AOC

Answer 28

$2500 per student for first 4 years | $160-180K MGI phaseout MFJ

Question 29

Lifetime Learning Credit

Answer 29

$2000 max undergrad/grad | phaseout $118-138K magi MFJ

Question 30

3 ways to finance graduate years

Answer 30

Fulbright Scholarship Stafford Loans Section 529 Coverdell withdrawal (to 30)

Question 31

Flowchart for Estate Tax (6 stages)

Answer 31

``` Gross Estate Adjusted Gross Estate Taxable Estate Tax Base Tentative Tax Net Estate Tax ```

Question 32

What's a synonym for DWR?

Answer 32

IRR

Question 33

What's arithmetic mean?

Answer 33

average

Question 34

What's time-weighted return?

Answer 34

geometric mean

Question 35

How long carry forward?

Answer 35

Forever

Question 36

oASDI

Answer 36

Old age, survivor, and disability insurance

Question 37

MAGI

Answer 37

Add in Muni bond interest

Question 38

ADP test

Answer 38

Actual deferral percentage

Question 39

ACP test

Answer 39

Actual contribution percentage

Question 40

How long can a donation over 60% of AGI be carried over?

Answer 40

5 yrs

Question 41

How is a collectible donated for unrelated use valued in a donation?

Answer 41

use basis, not fair market value, unless it's used related

Question 42

What is a bargain sale?

Answer 42

Something sold at a discount to fair market value.