Income Tax

Question 1

Investment Interest Deduction

Answer 1

limited to net investment income, which includes:
- interest
- nonqualified dividends
- royalties
- short-term gains

Question 2

Entertainment, Meals, Travel deduction %

Answer 2

0%
50%
100%

reimbursements is tax free

Question 3

FICA Tax calculation

Answer 3

6.2% of $147,000
1.45% of all income

Question 4

Dependent Care Credit

Answer 4

Child under 13

$3k for 1, $6k for 2+

X 20%

Question 5

Child Tax Credit

Answer 5

Under 17
$2,000 per child, $1,400 refundable

Phase out: $400k MFJ, $200k S

Question 6

Related Tax Party Trap

Answer 6

property sold to a related party using an installment sale who in turn sells it within 2 years. All gain is taxed to seller. related party still pays yearly installment

Question 7

Sale of Residence (Section 121)

Answer 7

2 of 5 years

$500k, $250k

must move 50 miles if using exception of moving because of new job

Question 8

$25,000 loss for Active Particpants

Answer 8

may deduct up to $25,000 per year of net losses from real estate activity from their active or portfolio income

AGI phase out: $100k-$150k 2 for 1