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Reg > Final 2 Weeks > Flashcards

Final 2 Weeks Flashcards

1
Q

How do you calculate sep ira problems

A

Take the lesser of 58,000 or 20% of net earnings

Net earnings equals net self employment income minus 50% of self employment tax

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2
Q

Section 1231 assets are

A

Depreciable personal property and real property used in business and held for more than 12 months

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3
Q

The accumulated earnings tax does not depend on

A

The number of stockholders in a corporations

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4
Q

If you owe less than $1000 after withholdings there is no penalty

A

For underpayment of taxes

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5
Q

Built in gains tax only applies if the corp was at one point a ____ Corp

A

C

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6
Q

Scholarships used for tuition, fees and books are (included or not included) in gross income

A

Not included

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7
Q

Basis of new building is in a destruction situation

A

Purchase price of new building minus deferred gain

Recognized gain is insurances proceeds above cost of new building
Deferred gain is cost of new building above cost of old building
New basis is old basis

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8
Q

Debt must be blank in order for the debtor to be taken through involuntary bankruptcy

A

Unsecured.

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9
Q

Built in gain tax is calculated based on fmv WHEN

A

At beginning of year

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10
Q

Partnerships recognize gain or loss on distributions to partners?

A

No!

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11
Q

For a general partnership distribution problem, reduce basis by amount of ALL DEBT (recourse and non recourse)

For llps or other limited arrangements, only reduce basis by share of non recourse debt

A

You know these problems brian cmon

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12
Q

Capital gains are (included or not included) in self employment income

A

Not included

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13
Q

Net earnings from self employment multiplied by blank% gives net self employment income

A

7.65

So, multiply total self employment income by 92.35% to get net self employment income

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14
Q

Self employment tax is the .9235 amount times 15.8 %

Adjustment to self employment tax is just BLANK if the top number

A

Half

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15
Q

Gambling winnings are included on form BLANK and gambling losses are deducted up to gambling winnings where

A

1040 above the line

Below the line as itemized deductions

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16
Q

A non taxable stock dividend’s holding period begins on

A

Date stock was originally purchased (as opposed to date dividend was issued)

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17
Q

If fmv is less than nbv (holder’s basis), and stock is sold for less than fmv, then the holding period starts BLANK and basis is BLANK

A

At the date of the gift

Fmv

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18
Q

For gift tax purposes, the value is

A

Fmv at date of gift

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19
Q

The taxable amount to a shareholder from a corporation’s e and p is

A

Cash received or fmv of property received

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20
Q

Percent of yearly taxable income you can’t deduct more than for depletion scenarios

A

50%

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21
Q

Percentage depletion is just total sales times BLANK

A

The given depletion rate (limited to 50% of yearly taxable income)

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22
Q

For a wash sale (within 30 days), whichever stocks they buy back do what to the loss from the within 30 day sale transaction

A

Disallow them.

So, if they sold 30 for a loss but bought back 20, 10 shares (at the loss rate, or alternatively, just the total amount not allowed to be deducted) is disallowed to be recognized and that deferred loss is added to the second purchase’s basis

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23
Q

The 10% amount limit for charitable contribution deductions applied to which amount on the income statement

A

Taxable income before charitable contributions and dividends received deductions

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24
Q

If you have a ‘remove items at consolidated level’ column, what you do is….

A

Sum up the whatever row the answer cell is on and negate the total as your answer

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25
Q

Ordinary business income is the same as

A

Net income

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26
Q

Interest expense is operational, interest income is a BLANK

A

Separately stated item

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27
Q

Salary has what effect on partnership basis in an s Corp

A

No effect

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28
Q

If there is a problem with charitable contribution and s corp, do what to the charitable contribution when calculating partner’s share of ordinary business income

A

Add it back. Separately stated items like charitable contributions are dealt with later

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29
Q

A self check for basis in s Corp problems is

A

Capital account balance

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30
Q

Do guaranteed payments to partners factor in when calculating net income?

A

Yes

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31
Q

Are qualified dividends taxable?

A

Yes

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32
Q

Are inventory sales eligible for installment sale recognition

A

No

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33
Q

3 steps for installment sales

A

1) calculate: sale price minus basis
2) get gross profit percentage ( equals gross profit divided by sales price)
3) multiply gross profit percentage by cash received

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34
Q

Is recaptured ordinary income (like depreciation recapture or excess depreciation over straight line) eligible for installment sales?

A

No

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35
Q

If you have installment sale and a 1231 gain, the 1231 gain portion over the TOTAL sale price gives you BLANK

A

Gross profit percentage, to be multiplied by cash collected, BUT THEN ADDED TO ORDINARY INCOME RECAPTURED

In year 2, multiple cash received by same gross profit percentage

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36
Q

If a person donates services to the formation of a c Corp, do those service increase basis?

A

Yes

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37
Q

When there is no mortgage, what is the basis to both sides of the transaction

A

Net book value aka basis

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38
Q

If mortgage assumed by a company is greater than the basis, then the shareholder has a BLANK

A

Gain to recognize of the difference

39
Q

When a corporation receives donated property with a mortgage, what is the corporation’s basis in the property

A

The higher of mortgage assumed or basis

40
Q

An s can hold c stock no problem. Can a c hold s stock and the s Corp remain in operation?

A

No

41
Q

Articles of incorporation include

A

Name of registered agent and number of authorized shares

42
Q

The ‘inside’ in inside basis refers to the BLANK

A

Basis of assets owned by the partnership

43
Q

An s election made by when is retroactively effective as of the first day of the taxable year

A

15th day of the third month (just think March 15th for calendar year)

44
Q

NOLs from 2017 and backward can only be carried back BLANK years and forward BLANK years

NOLs from 2018, 2019, and 2020 can be carried back BLANK years and forward BLANK years

NOLs arising 2021 and after can’t be carried back but can be carried forward BLANK TIME

A

2 and 20

5 and infinity

Infinity

45
Q

The oldest NOL is always used BLANK

A

FIRST

46
Q

Taxable interest and dividends from unrelated organizations go towards BLANK of a personal holding company

A

Determining income requirements

47
Q

When suing a general partnership, must go after BLANK’s assets first then BLANK’s

A

The partnership’s first

Then any individual partner

48
Q

S corporation debt is or is not included in stock basis

A

Is not included. Sorry for the the question Becker academic support

49
Q

Express warranty is created

A

By the description of the goods which forms part of the basis

50
Q

Warranty of title mean

A

No fuckin liens against the property. Means you can’t sell shit you don’t have full rights to

51
Q

Scholarships do or do not have to be reported in the students gross income

A

Do not

52
Q

Coverdell education savings account interest accumulated

With it without tax?

A

Tax free

53
Q

Medical expenses are deductible when

A

To the amount they’re above 7.5% of agi

54
Q

Scholarship amounts do what to the total expense amount able to be counted for American opportunity credit

A

Reduce total expense amount that can be counted

55
Q

Cars, light trucks, computers, copiers are what year property in macrs

A

5 year

Typically use mid year convention unless the 40% in final quarter applies

56
Q

Residential and non residential always use the what convention

A

Mid month convention

For year of sale, use mid month convention which means if sold in September (month 8, and middle of month) so it’s 8.5/12 x the total year percentage amount (2.564%)

57
Q

For personal property (not buildings) use mid year convention unless BLANK

A

More than 40% of the personal property placed in service for the year was place in service in the final quarter of the year

58
Q

If the mid quarter convention applies because of the 40% thing, use BLANK quarter to start depreciating

A

Whichever quarter that particular property was bought in. Ie, not all in same quarter

59
Q

C CORP

How to calculate a shareholder’s realized gain

How to calculate recognized gain

To calculate basis in shares it’s just

A

Fmv of property minus basis in property

To the extent of boot received. No boot, no gain

Net book value reduced by debt relieved plus cash contributed (minus any stupid cash received) plus gain recognized

60
Q

Income reported on form 1120 f is

A

Income earned by a u.s. branch

61
Q

Under UCC

A

Even if they demand a scale there is a contract formed

62
Q

PROPERTY USED IN BUSINESS GAIN ON SALE IS FUCKING ORDINARY IF ITS LESS THAN ACCUMULATED DEPRECIATION

A

I AM SO FUCKING FURIOUS AND FRUSTRATED

63
Q

If a group owns more than 80% s or c, property contributions

A

ARENT TAXABLE

64
Q

CARL HAS TO RECOGNIZE 150k cuz basis was 150 and liability was 300

His adjusted basis is reduced by what (HINT ITS ABOVE)

A

the liabilities assumed by the formed corporation

Basis corp has in property then is greater of: liability assumed or contributor’s basis in property plus gain recognized by contributor

65
Q

Property received by a corp’s basis equals

A

The person who contributed it’s basis

66
Q

Is there depreciation recapture for real property owned by an individual?

A

No!

67
Q

Section 291, real property owned by a corporation, means recapture as ordinary income BLANK

A

20% of the lesser of recognized gain or accumulated straight line depreciation

68
Q

Old basis PGR PBP minus WHAT

A

Boot received

69
Q

Aaa included which accounts in its calculation

A

Beginning aaa balance plus all ordinary, separately stated, non deductible (like fines and penalties), and distributions

70
Q

Does a contribution to a Roth account do shit to the calculation of agi?

A

No, not shit. Doesn’t factor in

71
Q

Can you write off a worthless non business loan when calculating agi?

A

You can. Deduct the loss of the value of the worthless non business loan

72
Q

For commercial real estate actively participated in, at risk amount is cash plus

A

Recourse debt

73
Q

For limited partnership, at risk amount is cash WHAT

A

Invested

74
Q

At risk amount decrease by amount of

A

Investor share of activity loss

75
Q

Dividends paid do or do not generate a book tax difference, and on what form are they reported

A

Do not generate a book tax difference

Form m2

76
Q

For a c Corp, investment losses are only deductible up to

A

Investment gains

If on the books it seems like they’ve deducted more than investment gains, add back the gain on form m1

77
Q

At risk amount for rental real estate problem is cash plus what type of debt

A

Recourse debt

78
Q

If the contributor is a non shareholder, the basis in the land the non shareholder contributed is

A

Zero

But don’t forget to add to that anything that must be done to the land to get it in to useable condition

79
Q

For the formation of a corporation, gain for the shareholder for contributed property is recognized as fmv minus their basis FOR REALIZED

FOR RECOGNIZED, JUST DEPENDS ON THE PRESENCE OF WHAT

A

The only thing needed to compare in this situation is basis vs fmv of the property. No cash, no liabilities, none of that

BOOT

80
Q

For Jones example forming a Corp with a majority ownership group

Basis 100
Liability 60
Fmv 120
Cash paid to shareholder 10

What are
Realized
Recognized
Basis

A

Realized 120-100 = 20
Recognized= 10 of boot cuz there is an amount realized
Basis = 100-60-10 paid to shareholder+ 10 cuz the shareholder had to recognize 10

81
Q 
Carey example
Basis 20
Liability 20
Fmv 40
Cash PAID BY SHAREHOLDER 30

For shareholder:
Realized
Recognized
Basis

A 
Realized = 40-20 basis = 20
Recognized = no boot so 0
Basis= 20 - 20 +30 = 30 (no recognized gain so nothing to add back)’
82
Q

Sub part f income example

A

Us parent, Irish company in England

83
Q

E and p problem flow of dividend/ordinary/capital is:

A

Dividend up to current and accumulated ep, then return of capital up to shareholder’s basis, then capital gains

84
Q

When a partner sells his portion of the partnership, realized gain is (for cash, liability and property)

A

Amount of cash, their portion of liabilities, and the FMV of the property given up

85
Q

In an auction without reserve, goods must be sold if an offer is what

A

Made

86
Q

Social security tax is based on what

A

Self employed person’s (the employer, if it asks) net profit from self employment

87
Q

How are capital gains carried for a corporation

A

Back 3 years and forward 5. Cap losses can only be used to offset cap gains

88
Q

Portfolio income (such as a temporary investment) cannot be used to offset passive income. Just a stand-alone fact.

A

Stand-alone fact

89
Q

Non qualified option doesn’t meet criteria to be either a blank or blank

A

ISO or ESPP

ISO qualifications: not more than 10% shareholder, option price less than fmv at date of grant, and stock was held two years from grant date and 1 from exercise date

ESPP qualifications: less than a 5% shareholder, and option is less than 85% of stock price when granted or exercised

90
Q

For a partnership problem, if someone contributes property after formation for a partnership share, do they recognize gain? If not, when do they recognize gain and how much.

A

No

They recognize gain later if the partnership sells the asset. They get all the gain up to the fmv at time of entry, then gain beyond that (based on sale price) is divided amongst partners proportionately

91
Q

Charitable contribution carries over for how many years

A

5

92
Q

Patnership, nonliquidating distribution, basis of building received by partner can’t exceed partner’s WHAT

A

Basis

93
Q

Are capital losses included in the total of separately stated items

A

Yes

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