Excludable Flashcards
Life Insurance
Paid by reason of death- excludable to benny
Prorated portions- excludable but interest is includable
Inheritance
excludable unless there is a sale on property
Gifts
excludable - detached and disinterested generosity and non business related
Interest on Bonds
State and local- exempt
Federal or corporate- taxable
Recovery of personal injury
Physical personal injury- excludable
Non personal- includable
Business Recovery
Compensation/lost profits- income
Damage to assets- reduce basis
Punitive
includable
Accident and health insurance
excludable
Gain from sale of principal residence
Every two years TP can exclude up to $250,000. As long as, TP owned and used the property as the principal residence for 2 years in the last 5 years
Improvements to rental property
Excludable - unless in lieu of rent
Education
Scholarships- excludable
Look for primary purpose and whether it is to further educational training (can’t be for past or future services)
Employee can exclude up to $5,250 received by an employer under an educational assistance program
Educational Saving Account
Contribute up to 2K annually to edu. savings account– income generated by the account is exempt from taxation
Contributions to Capital of a Corporation
Not taxable as long as it is not for past, present, and future services
Rationale- encouraging corp to expand operations in city
Meals and lodging
Convenience of employer
On employer’s premise and lodging is a condition of employment
Home Insurance, living expenses
If residence is destroyed- reimbursements for living is excludable
