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REG - Tax > Formulas > Flashcards

Formulas Flashcards

0
Q

Cost to cost method for % completion income recognition

A

Total cumulative cost/total expected cost

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1
Q

Kiddie tax

A

Total interest income
(950)
(Greater of 950 or child’s itemize ded related to unearned income)
= amt to be taxed at parent’s highest rate

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2
Q

Gross income recognition calculation (% completion income recognition)

A

(Total cumulative cost/total expected cost) * total contract price - recognized contract income

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3
Q

G/l on disposition of property

A

Amt realized
(Adj basis of assets sold)
= g/l realized

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4
Q

Net rental income/loss

A 
Gross rental income
Ppd rental income (non refundable deposits)
Rent cancellation pmts
Improvement in-lieu-of-rent
(Rental exp)
= net rental income/loss
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5
Q

Determine g/l (basic)

A

Amt realized
(Adj basis of asset sold)
= g/l

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6
Q

What is amt realized?

A 
Cash received (boot)
COD (boot)
Prop received at FMV
services received at FMV
Reduce the amt realized by any selling exp
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7
Q

Realized but not recognized g/l

A 
Amt realized
    Money received (boot)
    COD (boot)
    FMV prop
    (Sell exp)
(Adj basis of asset sold)
     Purchase = cost
     Gift = rollover cost 
     Inherit = step up/down to FMV
= gain (if you can HIDEIT you can exclude it from tax on gain)
      Homeowners exclusion
      Involuntary conversion
      Divorce prop settlement 
      Exchange of like kind
      Installment sale
      Treas cap & stock
Or loss (WRAP up and throw away)
      Wash sale losses
       Related party losses
      And
      Personal losses
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8
Q

Adjusted basis

A

Cost - accum dep

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9
Q

Amt realized

A

FMV new + boot recd

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10
Q

Reportable installment sale gain/income

A 
GP = sales - COGS
GP% = GP/Contract price 
       Contract price = SP - buyer liab
Earned rev (TI) = cash collections * GP %
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11
Q

Net investment income

A

Gross investment income

Invest exp in excess of 2% AGI

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12
Q

Deductible amount for casualty loss

A

Lower of: decrease in FMV of prop vs. basis
(Insurance proceeds)
($100)
(10% AGI)

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13
Q

Keough net earnings

A 
Business income
(Business expense)
=net business income 
(1/2 SE tax)
(Keough deduction) - 50,000 or 100% net earnings
=Keough net earnings
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14
Q

Deductible medical exp

A 
Qualified medical exp
(Insurance reimbursement)
= Qualified medical expense 'paid'
(7.5% AGI)
= Deductible medical exp
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15
Q

Deductible casualty & theft loss

A 
Smaller of - 1. Lost cost/adj basis or 2. Decreased FMV
(Insurance recovery)
=taxpayer loss
(100)
=eligable loss
(10% AGI)
= deductible loss
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16
Q

Credit for elderly and/or permanently disabled

A 
Single:
5000
(SS)
(1/2 excess AGI over 7500)
= balance 
*.15
= credit
Joint:
7500
(SS)
(1/2 AGI over 10000)
=balance
*.15
= credit
17
Q

Foreign tax credit

A

Lesser of:
Foreign taxes paid
OR
((TIfrom all foreign ops)/(TI + exemptions))*US tax

18
Q

AMT

A 
Regular TI
\+/- adjustments
\+ preferences
= AMT TI
(Exemption)
= AMT tax base
*tax computations
= tentative AMT tax
(Tax credits)
= tentative min tax
(Regular income tax)
=AMT
19
Q

Shareholder tax consequences - boot

A

NBV assets
(Liab)
= excess liab = boot

20
Q

Net basis in stock (to shareholder)

A

Asset NBV
(Liab)

Detailed:
FMV services rendered 
\+ gain recognized by shareholder
(Cash recd)
(Liab assumed by corp)
(FMV of non money boot recd)
= basis of CS
21
Q

Qualified production activities income

A

Domestic production gross receipts
(COGS)
(Other directly allocable exp/loss)
(Proper share of other deductions)

22
Q

General business credit

A 
Net income tax (reg tax + AMT - non refundable credits)
(Greater of:
    25% regular tax liab over 25000)
    Or
    Tentative min tax for yr)
23
Q

Cost depletion remaining basis

A

Remaining basis of property/remaining number of recoverable units

24
Q

Cost depletion deduction

A

Depletion unit rate * # units sold for year

25
Q

Corp AMT

  • adjustments
  • preferences
  • ACE
A 
Adjustments - +/- to income
    Long term contracts
    Installment sale dealer
    Excess dep (post 1986)
Preferences - add back to income 
    Percentage depletion
    Private activity - post 86
        Tax exempt int inc
    Pre 87 ACRS dep
Adjusted Current Earnings (ACE)
    Muni interest income
        Tax exempt int inc
    Increase CSV life ins 
    Non SL dep
    DRD - unrelated 70% exclusion
26
Q

Accumulated E & P

A

Accumulated E & P beginning
+/- current E & P less and distrib deemed from current
(Distrib from accumulated E&P)

27
Q

Corp property dividend

A

FMV property
(NBV)
= corp gain –> E&P

28
Q

Corp sells assets & distributes cash to shareholders

A

Tax 1. SP
(Basis)
= taxable gain/loss

Tax 2. Proceeds
(Stock basis)
= taxable gain/loss

29
Q

Corp distributes assets to shareholders

A

Tax 1. FMV
(Basis)
= taxable g/l (to corp)

Tax 2. SP
(Stock basis)
= taxable g/l (to shareholder)

30
Q

Shareholder basis in S corp stock

A 
Initial basis
\+ income items
\+ additional shareholder invest in corp stock
(Distrib to shareholders)
(Loss/exp items)
= end basis

BASE

31
Q

Partner’s original basis

A

Cash - amt contrib
Property - adj basis (NBV)
(Liab) - assumed by other partners is reduction
Services - FMV
Liab - other partners liab assumed by incoming partner

32
Q

Partner basis formula

A 
Beginning capital account
\+ % all income 
(% all losses)
(Withdrawals)
= ending capital account
\+% recourse liab
= year end basis

BASE
like a bank account - withdrawal = nontaxable = NBV

33
Q

Partnership basis

A

Capital account + your share of liab

34
Q

Complete withdrawal - nontaxable liquidation

Partner basis

A 
Beginning cap account
% income/loss up to withdrawal
= partners capital account
% of liab
= adj basis at withdrawal
(Cash withdrawn)
= remaining basis to be allocated to assets withdrawn --> zero out to get out
35
Q

Capital gain/loss of sale of partnership interest

A 
Beg cap account
% income (loss) up to sale
= cap account @ sale date
% of liab
= adj basis
(Amt received) - cash, COD, FMV property
= capital gain/loss
36
Q

DNI

A 
Estate gross income
(Estate deductions)
=adjusted total income
\+adjusted tax-exempt interest
(Capital gains)
=DNI
37
Q

Income distribution deduction (DNI)

A

Actual distribution to beneficiary
Or
DNI (less tax exempt interest)

38
Q

Federal estate tax

A 
FMV assets
(Liab)
= net worth
(Transfers)
= remainder
* tax rate
=estate tax
(Credits)
= federal estate tax
39
Q

Estate transfer tax

A 
Gross estate
(Non discretionary deductions)
=adj gross estate
(Discretionary deductions)
=taxable estate
Adjusted taxable gifts
=tentative tax base at death
*uniform tax rtes
=tentative estate tax
(Gift taxes paid)
=gross estate tax
(Applicable credit)
=ESTATE TAX DUE
40
Q

Tax due on current gifts

A 
Gross gifts in calendar year (FMV)
(Exclusions of $13000/donee/year)
(Unlimited marital ded if gift to spouse)
(Charitable gifts)
=taxable gifts this year
Taxable gifts of prior years
=cumulative lifetime gifts
41
Q

Tax on cumulative gifts

A

Tax on cumulative lifetime gifts (calculate)
(Gift tax pd on prior years)
(Applicable credits)
=tax due on current gifts

REG - Tax (11 decks)

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