Final Test Prep Flashcards
Limit of individual deduction
$12,400
When would you use medical deduction over standard deduction
if medical+state>standard
Start of Net Operating Loss 80% limit
after 2017
Net Operating Loss limit
80% of income
Bonus Deprectiation
allows for 100% write-off against income
Section 179 deprectiation
lesser of $1,040,000 or net income
MACRS depreciation
Accelerated but over multiple years (depending on type of asset)
Section 179 depreciation limits
$1,040,000
reduced dollar for dollar over $2,700,000
Long Term Capital Loss Limit
$3,000 per year
How is basis handled in divorce
Original basis carry’s over, not uptick
How are gains from sale of home handled for a move
Max $500,000 if in home for 24+ months. Reduced prorata for each month below 24 months
At-Risk Rule
Passive owners cannot claim a loss for more than they are at-risk in the investment (typically same as the basis)
“Material” participation
> 500 hours
100 hours and more than any other participant
100 hours devoted to several activities that combine for >500 hours
Alternative Minimum Tax
Difference between the market price and exercise price at the date of execution
S Corporation
- limited liability
- can have shareholders come and go
- all income passed through (limited to ownership percentage
- Can be owned and operated by a single share holder
- No more than 100 owners
C Corporation
retains income
LLC
- limited liability
- flow through taxation (adjustable to other than ownership %)
- not ideal for a public company
AGI limits for passive inv. losses
$100k-$150k (reduced 50 cents per dollar over)
American Opportunity Tax Credit Phaseout
MFJ - $160k - 180k
Single - $80k - 90k
Lifetime Learning Credit Phaseout
MFJ - $116k - 136k
Single - $59k - 69k
American Opportunity Credit Amount
First $2,000 @ 100%
Next $2,000 @ 25%
Phased out proportionally to amount within band
Lifetime Learning Credit
$10,000 of expenses @20%
Student Loan Interest Phase Out
MFJ - $140k-170k
Single - $70k-85k
Student Loan Interest Max
$2,500
