Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CFP > Income Tax Planning > Flashcards

Income Tax Planning Flashcards

You may prefer our related Brainscape-certified flashcards:
CFP® flashcards
1
Q

Capital Assets

A

Most personal use Assets and Investment Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is not a capital asset. defined by section 1221(a)

A

Inventory
Depreciable property used in trade or business
copy right and creative works (if owned by creator)
accounts and notes receivable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Increases to basis

A

Capital improvements
Assessments for local improvements
Cost of restoring damaged property after casualty loss
Legal fees
Zoning costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Decreases to basis

A

Casualty/ theft loss reimbursements
Deduction for clean fuel vehicles
Section 179 deduction
Credit for qualified electric vehicles
Depreciation
Non taxable Corp distributions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Carry over basis

A

The cost basis of the exchanged property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Double basis

A

Gifted asset where FMV is less than donors basis at time of gift

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Collectibles tax rate

A

28%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Unrecaptured section 1250 gain tax rate

A

25%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Qualifying small business stock (section 120) tax

A

Portion taxed at 28% if holding period is at least 5 years.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Wash Sale

A

Occurs when taxpayer disposes of securities at a loss and acquires substantially identical securities within 30 days before or after the date of the loss sale

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Wash Sale rules

A

the disallowed loss is added to the cost of the new stock to determine basis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Do wash sale rules apply? Index Fund for Index Fund

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Do Wash sale rules apply? Index Fund for Managed Large Cap fund

A

no

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Capital Asset Losses

A

Deductible to extent of capital gains, plus $3,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Personal Use Property Losses

A

Losses may not be recognized or deducted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Trade or Business Losses

A

Ordinary Loss, deductible against ordinary income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

1244 Stock

A

allows an individual to deduct up to 50k (s), 100k (mfj) for losses on small business stock as an ordinary loss.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Section 267 Stock

A

Disallows losses from direct or indirect sales or exchanges of property between related parties.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Section 1231 Asset

A

Assets used in trade or business, not including inventory & Copyrights.

20
Q

Tax Benefit of section 1231 asset

A

Gains are treated as capital gains and losses treated as ordinary loss.

21
Q

Section 1245 Property

A

Property that is or has been subject to an allowance for depreciation

22
Q

Section 1245 Property

A

Property that is or has been subject to an allowance for depreciation or amortization. Tangible personalty used in trade or business and includes depreciable property

23
Q

Excluded from 1245 Property

A

Real property (land & buildings),

24
Q

Section 1250

A

Governs recapture of depreciation on real section 1231 assets. (business realty such as land and buildings)

25
Q

Section 1033

A

Permits nontaxable treatment of gains if the replacement property equals or exceeds amount realized. (Involuntary conversion/ condemnation)

26
Q

Section 1035

A

provides for tax free exchanges of some insurance policies

27
Q

5 different filing statuses

A

Single, Married Filing Joint, Married filing separate, Head of household, widower

28
Q

Who qualifies for additional standard deduction

A

Those who are 65 and older or blind. 65 and blind gets two additional standard deductions

29
Q

Dependent Standard deduction

A

1,150 or 400 plus earned income (2022) not to exceed regular standard deduction

30
Q

4 tests required for qualifying child

A

relationship, abode, age, and support

31
Q

Form 8332

A

Allows non custodial parent to claim child as dependent (separation or divorce)

32
Q

4 Qualifying Relative tests

A

Relationship test, Gross income test, Support test, Not a qualifying Child test

33
Q

Annuity Exclusion Ratio

A

Investment in contract/ Expected Total return

34
Q

Retirement Plan distribution- Annuity Exclusion Ratio

A

Cost basis in annuity/ Total expected benefit

35
Q

Retirement Plan distribution- Annuity Exclusion Ratio

A

Cost basis in annuity/ Total expected benefit

36
Q

Exclusions from gross income

A

Gifts, Bequests, inheritance, life insurance proceeds, gain on personal residence, employer sponsored accident and health plans, meals and lodging sponsored by employer, some fringe benefits, interest on some gov bonds, discharge of debt

37
Q

AGI Deductions

A

Business expense, losses on sale of property, rental & royal property, alimony (before 2019), half of self-employment tax, health insurance premiums paid by individual, contributions to pension, penalty on premature withdrawals, interest on student loans, health sav acc, teacher expense.

38
Q

Public Charities

A

Church, school, hospital, government entities

39
Q

Private Charities

A

veterans, fraternal orders, some private foundations,

40
Q

Below the line (itemized deductions)

A

medical expenses, certain state and local taxes, contributions to qualified charity, charitable contributions directly from IRA,casualty losses, personal interest expense (mortgage), qualified business income QBI

41
Q

Kiddie Tax

A

applied to the net unearned income of a child under 19 or 24 and a full time student.

42
Q

Kiddie Tax- Net unearned income

A

unearned income less standard deduction, less 1150 taxed at child marginal tax rate

43
Q

child earned income standard deduction

A

earned income plus 400. not to exceed normal standard deduction

44
Q

Corporation Tax: What are the dividend received deductions based on ownership percentages

A

ownership percentage dividend received deduction.
Less than 20% - 50%
20%- Less than 80% - 65%
80% and over - 100%

45
Q

What is a personal service corporation (PSC)

A

c corp where all activities involve performance of service in the following fields: health, law, engineering, architecture, accounting, actuarial science, and consulting

46
Q

Personal Holding Company Requirements

A

1.at least 60% of corporations adjusted ordinary gross income is from dividends, interest, rent and royalties
2. in the last half of the year more than 50% of outstanding stock owned by 5 or less people.

CFP (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions