FINAL R1&R2 Flashcards
What is included in “taxable interest”?
interest on;
- General investment accounts (money market account)
- federal obligations
- Interest on US treasury Bonds
- construction loan
- Federal and state income tax refund
What interest is NOT taxable?
- State and muni bond interest
- auto loan interest
What are the conditions for series EE bonds?
- Purchaser of the bonds must be the sole owner of the bonds (or joint owner with his or her spouse)
- for post 1989-> taxpayer is 24+ yrs old and used to pay higher edu expenses
How are withdrawals from traditional IRAs taxed as?
As ordinary income
What are the limits for 2020 QBI?
Single= 163,300 -213,300 MFJ = 310,200 - 426,600
How do you calculate dependent income?
Taking unearned income less $1,100 (std deduction) - $1,100(taxed at child’s marginal rate)
What is the threshold for individual CC?
up to 60% in cash
up to 30% for other (propert/stocks)
How will $10,000 taken out of your IRA be recognized as?
$0 penalty and $10,000 as income
What amount of qualified defined contribution plan is taxable?
Nothing is taxable until distributed
How to calculate penalty tax on withdrawal on IRA?
- calc regular income tax on amount withdrawn from the IRA (withdraw * marginal rate)
- Penalty tax = 10% * withdraw amount
Add 1+2= total tax liability
Tax deductible? If so, For or From AGI:
Roth IRA contribution?
Not deductible (even earnings and distributions as well)
Tax deductible? If so, For or From AGI:
Repair and maintenance costs?
Not Deductible unless casualty loss
Tax deductible? If so, For or From AGI:
Medical insurance premium
Dedeuctible from AGI
Tax deductible? If so, For or From AGI:
Homeowners expenses?
Not deductible
Tax deductible? If so, For or From AGI:
Investment interest expense
Deduction from AGI
Tax deductible? If so, For or From AGI:
Penalties on early withdrawal of savings account
Deductible For AGI
Tax deductible? If so, For or From AGI:
Interest on home Equity Loan
Not deductible.. only interest expenses allowed FROM AGI are investment interest and home mortgage interest
Tax deductible? If so, For or From AGI:
Life insurance premiums
Not deductible
Is mortgage interest on loans to acquire principal residence allowed and how much?
yes, up to $750k
Are points on a home mortgage deductible?
Yes, fully deductible
What are the AMT preferences?
Tax-exempt interest from private activity bonds
accelerate depletion, depreciation, or amortization
What is added back for AMT purposes?
State income taxes, real estate property taxes, STD deductions
In CC: When a property is owned more than 1 year, what is the amount deducted?
The FMV of donation.
What is the CC deduction allowed for transportation?
.14 cents per mile
in an incentive stock option, what is the income recognized at date of grant?
none
