Final 2 Weeks

Question 1

How do you calculate sep ira problems

Answer 1

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

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

Question 2

Section 1231 assets are

Answer 2

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

Question 3

The accumulated earnings tax does not depend on

Answer 3

The number of stockholders in a corporations

Question 4

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

Answer 4

For underpayment of taxes

Question 5

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

Answer 5

C

Question 6

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

Answer 6

Not included

Question 7

Basis of new building is in a destruction situation

Answer 7

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

Question 8

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

Answer 8

Unsecured.

Question 9

Built in gain tax is calculated based on fmv WHEN

Answer 9

At beginning of year

Question 10

Partnerships recognize gain or loss on distributions to partners?

Answer 10

No!

Question 11

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

Answer 11

You know these problems brian cmon

Question 12

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

Answer 12

Not included

Question 13

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

Answer 13

7.65

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

Question 14

Self employment tax is the .9235 amount times 15.8 %

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

Answer 14

Half

Question 15

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

Answer 15

1040 above the line

Below the line as itemized deductions

Question 16

A non taxable stock dividend’s holding period begins on

Answer 16

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

Question 17

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

Answer 17

At the date of the gift

Fmv

Question 18

For gift tax purposes, the value is

Answer 18

Fmv at date of gift

Question 19

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

Answer 19

Cash received or fmv of property received

Question 20

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

Answer 20

50%

Question 21

Percentage depletion is just total sales times BLANK

Answer 21

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

Question 22

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

Answer 22

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

Question 23

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

Answer 23

Taxable income before charitable contributions and dividends received deductions

Question 24

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

Answer 24

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

Question 25

Ordinary business income is the same as

Answer 25

Net income

Question 26

Interest expense is operational, interest income is a BLANK

Answer 26

Separately stated item

Question 27

Salary has what effect on partnership basis in an s Corp

Answer 27

No effect

Question 28

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

Answer 28

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

Question 29

A self check for basis in s Corp problems is

Answer 29

Capital account balance

Question 30

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

Answer 30

Yes

Question 31

Are qualified dividends taxable?

Answer 31

Yes

Question 32

Are inventory sales eligible for installment sale recognition

Answer 32

No

Question 33

3 steps for installment sales

Answer 33

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

Question 34

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

Answer 34

No

Question 35

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

Answer 35

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

Question 36

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

Answer 36

Yes

Question 37

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

Answer 37

Net book value aka basis

Question 38

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

Answer 38

Gain to recognize of the difference

Question 39

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

Answer 39

The higher of mortgage assumed or basis

Question 40

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

Answer 40

No

Question 41

Articles of incorporation include

Answer 41

Name of registered agent and number of authorized shares

Question 42

The ‘inside’ in inside basis refers to the BLANK

Answer 42

Basis of assets owned by the partnership

Question 43

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

Answer 43

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

Question 44

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

Answer 44

2 and 20 5 and infinity Infinity

Question 45

The oldest NOL is always used BLANK

Answer 45

FIRST

Question 46

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

Answer 46

Determining income requirements

Question 47

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

Answer 47

The partnership’s first Then any individual partner

Question 48

S corporation debt is or is not included in stock basis

Answer 48

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

Question 49

Express warranty is created

Answer 49

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

Question 50

Warranty of title mean

Answer 50

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

Question 51

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

Answer 51

Do not

Question 52

Coverdell education savings account interest accumulated | With it without tax?

Answer 52

Tax free

Question 53

Medical expenses are deductible when

Answer 53

To the amount they’re above 7.5% of agi

Question 54

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

Answer 54

Reduce total expense amount that can be counted

Question 55

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

Answer 55

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

Question 56

Residential and non residential always use the what convention

Answer 56

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%)

Question 57

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

Answer 57

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

Question 58

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

Answer 58

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

Question 59

C CORP How to calculate a shareholder’s realized gain How to calculate recognized gain To calculate basis in shares it’s just

Answer 59

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

Question 60

Income reported on form 1120 f is

Answer 60

Income earned by a u.s. branch

Question 61

Under UCC

Answer 61

Even if they demand a scale there is a contract formed

Question 62

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

Answer 62

I AM SO FUCKING FURIOUS AND FRUSTRATED

Question 63

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

Answer 63

ARENT TAXABLE

Question 64

CARL HAS TO RECOGNIZE 150k cuz basis was 150 and liability was 300 His adjusted basis is reduced by what (HINT ITS ABOVE)

Answer 64

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

Question 65

Property received by a corp’s basis equals

Answer 65

The person who contributed it’s basis

Question 66

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

Answer 66

No!

Question 67

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

Answer 67

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

Question 68

Old basis PGR PBP minus WHAT

Answer 68

Boot received

Question 69

Aaa included which accounts in its calculation

Answer 69

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

Question 70

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

Answer 70

No, not shit. Doesn’t factor in

Question 71

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

Answer 71

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

Question 72

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

Answer 72

Recourse debt

Question 73

For limited partnership, at risk amount is cash WHAT

Answer 73

Invested

Question 74

At risk amount decrease by amount of

Answer 74

Investor share of activity loss

Question 75

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

Answer 75

Do not generate a book tax difference Form m2

Question 76

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

Answer 76

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

Question 77

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

Answer 77

Recourse debt

Question 78

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

Answer 78

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

Question 79

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

Answer 79

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

Question 80

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

Answer 80

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

Question 81

``` Carey example Basis 20 Liability 20 Fmv 40 Cash PAID BY SHAREHOLDER 30 ``` For shareholder: Realized Recognized Basis

Answer 81

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

Question 82

Sub part f income example

Answer 82

Us parent, Irish company in England

Question 83

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

Answer 83

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

Question 84

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

Answer 84

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

Question 85

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

Answer 85

Made

Question 86

Social security tax is based on what

Answer 86

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

Question 87

How are capital gains carried for a corporation

Answer 87

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

Question 88

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

Answer 88

Stand-alone fact

Question 89

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

Answer 89

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

Question 90

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.

Answer 90

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

Question 91

Charitable contribution carries over for how many years

Answer 91

5

Question 92

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

Answer 92

Basis

Question 93

Are capital losses included in the total of separately stated items

Answer 93

Yes