FINAL R1&R2 Flashcards

1
Q

What is included in “taxable interest”?

A

interest on;

  • General investment accounts (money market account)
  • federal obligations
  • Interest on US treasury Bonds
  • construction loan
  • Federal and state income tax refund
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2
Q

What interest is NOT taxable?

A
  • State and muni bond interest

- auto loan interest

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3
Q

What are the conditions for series EE bonds?

A
  1. Purchaser of the bonds must be the sole owner of the bonds (or joint owner with his or her spouse)
  2. for post 1989-> taxpayer is 24+ yrs old and used to pay higher edu expenses
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4
Q

How are withdrawals from traditional IRAs taxed as?

A

As ordinary income

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5
Q

What are the limits for 2020 QBI?

A
Single= 163,300 -213,300
MFJ = 310,200 - 426,600
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6
Q

How do you calculate dependent income?

A

Taking unearned income less $1,100 (std deduction) - $1,100(taxed at child’s marginal rate)

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7
Q

What is the threshold for individual CC?

A

up to 60% in cash

up to 30% for other (propert/stocks)

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8
Q

How will $10,000 taken out of your IRA be recognized as?

A

$0 penalty and $10,000 as income

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9
Q

What amount of qualified defined contribution plan is taxable?

A

Nothing is taxable until distributed

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10
Q

How to calculate penalty tax on withdrawal on IRA?

A
  1. calc regular income tax on amount withdrawn from the IRA (withdraw * marginal rate)
  2. Penalty tax = 10% * withdraw amount

Add 1+2= total tax liability

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11
Q

Tax deductible? If so, For or From AGI:

Roth IRA contribution?

A

Not deductible (even earnings and distributions as well)

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12
Q

Tax deductible? If so, For or From AGI:

Repair and maintenance costs?

A

Not Deductible unless casualty loss

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13
Q

Tax deductible? If so, For or From AGI:

Medical insurance premium

A

Dedeuctible from AGI

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14
Q

Tax deductible? If so, For or From AGI:

Homeowners expenses?

A

Not deductible

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15
Q

Tax deductible? If so, For or From AGI:

Investment interest expense

A

Deduction from AGI

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16
Q

Tax deductible? If so, For or From AGI:

Penalties on early withdrawal of savings account

A

Deductible For AGI

17
Q

Tax deductible? If so, For or From AGI:

Interest on home Equity Loan

A

Not deductible.. only interest expenses allowed FROM AGI are investment interest and home mortgage interest

18
Q

Tax deductible? If so, For or From AGI:

Life insurance premiums

A

Not deductible

19
Q

Is mortgage interest on loans to acquire principal residence allowed and how much?

A

yes, up to $750k

20
Q

Are points on a home mortgage deductible?

A

Yes, fully deductible

21
Q

What are the AMT preferences?

A

Tax-exempt interest from private activity bonds

accelerate depletion, depreciation, or amortization

22
Q

What is added back for AMT purposes?

A

State income taxes, real estate property taxes, STD deductions

23
Q

In CC: When a property is owned more than 1 year, what is the amount deducted?

A

The FMV of donation.

24
Q

What is the CC deduction allowed for transportation?

A

.14 cents per mile

25
Q

in an incentive stock option, what is the income recognized at date of grant?

A

none