Income Tax Flashcards

Question

65 and Blind

Answer 1

single: 1950 mfj: 1550 extra STANDARD deduction for each item, 65 and blind

Answer 2

MITCCM (my income tax check comes monday) Med & dental expenses exceeding 7.5% agi Investment Interest expense (max: NII, typically margin acct interest) Taxes (RE, state, local, sales) MAX 10k (SALT) Casualty losses Charitable gifts Mortgage interest (up to 750k of principal. up to 1mm before 2017)

Answer 3

income from property held for investment interest, divs, royalties, ST gain divs included Only if taxpayer requests to not use reduced rates, LT gains included if taxpayer opts out of reduced rates

Answer 4

Lesser of Basis or FMV Subtract insurance coverage Subtract $100 Subtract 10% of AGI

Answer 5

SE ONLY!!!! NO W2!!!!!! limited to gross income derived from activity reduced by all deductible expenses (net biz income) prove that you use exclusively for biz and on a regular basis no other location where they conduct substantial activity

Answer 6

not lavish or extravagant expenses for activities for taxpayers employees (i.e. office parties) are deductible meals are 50% deductible

Answer 7

corps can pay 100% of the expense but cannot deduct anything for it

Answer 8

take the higher of earned & unearned income. 1300 - standard deduction 1300 - taxed @ kid ($130) next amt taxed at parents rate LTCG taxed at LT rates (so kids would pay 0%) earned income standard deduction = earned income + 450 NO MORE THAN SINGLE STANDARD DEDUCTION

Answer 9

NBGP (Not boutta go pro) NET schedule c income board of directors fees GP (k-1) income part time earnings

Answer 10

RDWD (real dudes wear dior) Real estate income or rents paid Distributive share of income or loss of limited partner Wages from S Corp Distributions from S Corp

Answer 11

168600 the max amount of earned income that employees must pay social security taxes amounts above 168600 are only subject to medicare tax NOTE: in test questions, if SE income is over 168600, you did something wrong. they will not give you an amount above this

Answer 12

.1413 deductible part: 1/2 of that, .0765 multiply by NET schedule C income net = gross income - expenses

Answer 13

on w2 earnings up to 168600 - employee and employer each pay 6.2 +1.45 (15.3) total of FICA taxes 1.45 medicare (total 2.9%) paid when over the taxable wage base

Answer 14

UP TO AGE 13 20% of allowable expenses 3k for 1 dependent 6k for 2 ore more dependents

Answer 15

2k per child under 17 (includes step and foster) up to 1700 is refundable 400k MFJ MAGI phaseout 200k S MAGI phaseout

Answer 16

500 dependents in HH that are not kids dependent cant have taxable income over 4500

Answer 17

all qualified expenses are eligible (court, attorney, cost to adopt foreign child, adoption fees) for kids 17 and younger, kid at any age with special needs NONQUALIFYING: - surrogates - adopting spouses kid can claim expenses from previous years expenses from this year d following year will be claimed the year incurred

Answer 18

nonrefundable 65 + permanently and totally disabled

Answer 19

EACH year: select a credit or deduction for foreign taxes paid nonrefundable

Answer 20

REFUNDABLE for people who wore and have income under certain amountsI

Answer 21

profit/total contract price = gross profit percentage installment x gross profit percentage = LTCG

Answer 22

property sold to related party and related party sells within 2 years: ALL GAIN NOW TAXED RETROACTIVELY IN FIRST YEAR to me even thought installment sale payments continue

Answer 23

net operating losses if biz operations result in excess of deductible expenses over gross income, excess is a net operating loss that can be carried forward to reduce taxable income. NO CARRYING BACK

Answer 24

only applies to first million dollars of stock (C or S) issed loss of 100k/yr jt or 50k otherwise is ORDINARY for that year, and the 3k cap loss. without the 1244 stock, you dont get the ordinary loss for this year only the carry forward

Answer 25

up to 20% of QBI from PASS THROUGH ENTITIES (sole prop, partnership, s corp, llcs) phased out for service related businesses

Answer 26

LPs must have at least 1 gp. limited partners are liable for debt only to the extent of their capital investment not active in investment operations

Answer 27

increased by legal fees, commissions, sales tax, freight, improvements NOT REPAIRS, RE TAXES, OPERATING EXPENSES

Answer 28

intangibles amortized

Answer 29

qualifying property: 1245 CANNOT CREATE LOSS limited to taxable income from ANY biz expense up to 1.22mm in year of acquisition (if over 3050000, reduced $ for $) why? to not have to maintain macrs schedule

Answer 30

CAT CORN CAT C 5 year - computer, auto, truck 7 year - office equipment except computers

Answer 31

CATCORN RN 27.5 - res real estate 39 - commercial real estate

Answer 32

only real estate

Answer 33

if you receive boot: gain recognized is boot if you pay boot: no gain recognized your basis carries over 3 numbers to know: fmv received, adjusted basis of given up property

Answer 34

500k mfj, 250k single live there 2 of 5 years preceeding sale **realized or recognized gain*** realized would be before the exclusion, recognized would be after

Answer 35

IPOD intangible drilling private munis oil and gas PERCENTAGE depetion depreciation (macrs/acrs only, no straight line)

Answer 36

stock option bargain element re, state/city taxes home equity unless used for home improvement

Answer 37

increase taxable income 1. defer payment of charitable giving, prop/state taxes, deductible med expenses (MORE TAXABLE INCOME) DEFER EXERCISE OF iso OR disqualify so it becomes NSO purchase pulblic purchase munis

Answer 38

deduct 25k/year from RE activity from active or portfolio income phased out 100-150 on 2 for 1

Answer 39

rent for fewer than 15 days, rental income is excludible but no deductions allowed

Answer 40

personal use cannot exceed longer of 14 days or 10% of rental period

Answer 41

Deduction Equivalent Credit (i.e. of 25000) multiply by tax rate (credit will be smaller than the deduction) 25k x 37% = 9250 credit / tax rate = deduction amount ALLOWED ANNUALLY FOR 10 YEARS

Answer 42

NO PHASEOUT deduction equivalent tax credit up to 25k

Answer 43

INS: lapse w loan section 162 Inv: zero/strips/tips declared but not paid divs & cgs tax: k1 income from lp/flp recaptures ret: esop (basis only) secular tr

Answer 44

activity w net income (prfit in 3 of 5 consecutive years = biz) horses: 2 of 7 years NO DEDUCTING HOBBY RELATED EXPENSES

Answer 45

no credit for agi over 76,500 MFJ max 2k single, 4k mfj 50,20,10% of contribution

Answer 46

under 29 million in revenue

Answer 47

mandatory if biz averages over 29mil in rev during 3 prior years

Answer 48

general partners not personally liable for malpractice related claims arising from misconduct ofanother gp

Answer 49

corp can accumulate 250k (150k for psc) without establishing a biz need. 20% of the accumulated taxable income for that year (over the 250k) encourages corps to pay dividends

Answer 50

income IS distributed income taxed to beneficiary normally no distribution of corpus no charitable gifts still treated as sep tax entity exemption 100

Answer 51

income must/may be accumulated income accumulated is taxed to trust, distributed is taxed to bene corpus can be distributed may make charitable gifts MUST BE IRREVOCABLE taxed as distinct entity exemption 300

Answer 52

limits the amount that trust benes must report as income trust can claim deduction for amount distributed limit portion that is taxable to beneficiaries no double taxation income dist deduction is lesser of DNI or amt distributed to benes

Answer 53

land and intangibles

Answer 54

can only use in estates final return (1041)

Answer 55

all depreciation recovered in year of sale use 1245 recapture rules recapture up to realized gain excess gain (1231 amt) is subject to installment sale rules

Answer 56

basis of stock (lot that triggered wash sale) increased by amount of disallowed loss

Answer 57

find "sold" portion of basis sold portion proceeds - above