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Incorrect Flashcards

1
Q

How much is the QBI deduction?

A

20% of qualified business income

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2
Q

How much $ can be excluded from gross income for payments made by an employer for educational expenses?

A

Up to $5,250

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3
Q

Is interest received on state and local bonds/obligations taxable?

A

No, tax exempt

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4
Q

Is scholarships for room and board taxable?

A

Yes

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5
Q

What is the SEP IRA deduction?

A

The lessor of $69,000 or
20% of net earnings

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6
Q

When deducting medical expenses what do you use and how do you calculate it?

A

You use a AGI floor by multiplying AGI by 7.5%. Add up the total expenses and subtract by AGI floor to get the deduction

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7
Q

Are state taxes paid an itemized deduction

A

Yes

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8
Q

What is the limit when deducting long term capital gain property at the FMV

A

30% of AGI

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9
Q

What are the two broad categories for above the line deductions?

A
  1. Profit motive deductions (business expenses)
  2. Adjustments
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10
Q

Does gross income matter for the definition of dependent for the medical expense deduction?

A

No

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11
Q

Is interest on qualified education loans deductible for or from agi?

A

For as an adjustment

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12
Q

Is a personal automobile a capital asset?

A

Yes

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13
Q

What is the maximum IRA deduction

A

$7000 for single

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14
Q

How much depreciation is taken for the month that real property is disposed of?

A

One half month

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15
Q

What is the maximum time you are able to file for a refund?

A

Up to 3 years after the original due date including extensions or 2 years after actual payment.

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16
Q

How to qualify for the Section 179 expense deduction?

A

-The property must be used in the taxpayers business
-Purchased from an unrelated party

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17
Q

What does a personal holding company consist of?

A

Considered a personal holding company if 60% of adjusted ordinary gross income consists of:
-dividends
-taxable interest
-royalties
-net rent

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18
Q

What is adjusted taxable income (ATI)

A

Income for the year excluding all interest income and interest expense

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19
Q

What is floor plan financing?

A

Debt used to acquire motor vehicles held for sale or lease where the debt is secured by the acquired inventory

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20
Q

When can a business deduct all of their interest expenses?

A

When AVG gross receipts is less then $30 million

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21
Q

How are dividends received by a partnership treated?

A

Treated as separately stated income by the partnership, taxable to the partner

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22
Q

What is the net section 123 gain(loss) ?

A

An asset that was used in the business that held for at least 3 years and sold.

23
Q

A CPA may receive a contingent fee for…

A

successfully concluding an internal revenue service examination of an original tax return

24
Q

A covered opinion includes…

A

any written or electronic ADVICE concerning transactions as listed transactions

25
Q

What are the requirements for written advice (Circular 230)

A

The practitioner must use reasonable efforts to identify and ascertain the facts relevant to written advice on each federal tax matter

26
Q

Is workers comp included in gross income?

A

No

27
Q

On which date does the holding period of a partnership’s interest acquired in exchange for a contributed capital asset begin?

A

The date the partner’s holding period of the capital asset began.

28
Q

If a situation involves a “guarantor of collection,” the creditor is required

A

to proceed against the debtor first, and only when the creditor is unable to collect from the debtor, is the creditor allowed to go after the surety.

29
Q

The three-factor formula is based on

A

property, payroll, and sales factors

30
Q

Under the liability provisions of Section 10, Rule 10b-5 the plaintiff must prove that:

A
  • Loss was suffered as a result of the misstatements
  • Information was relied upon
  • Error - grossly negligent or scienter.
31
Q

kiddie tax rules prevent parents and grandparents in high tax brackets from

A

shifting income (especially from investments) to children in lower tax brackets. Kiddie tax is applicable for:
- A child who is 17 years or younger at year end; or
-A child is 18 years of age at year end and the child doesn’t have earned income that exceeds half of his or her support; or
-A child with age 19 to 23 at year-end, he / she is a student (attends college for five months during the year) and doesn’t have earned income that exceeds half of his or her support.

32
Q

The Sherman Antitrust Act prohibits

A

contracts, combinations, and conspiracies that restrain trade and monopolize.

33
Q

For partnership basis distributed property is calculated at its

A

basis

34
Q

If an individual paid income tax in year 1 but did not file a year 1 return because his income was insufficient to require the filing of a return, the deadline for filing a refund claim is

A

Two years from the date the tax was paid

35
Q

Any exempt organization must file a business income tax return and pay income taxes on

A

unrelated business income (UBI) in excess of $1,000

36
Q

What is Anticipatory repudiation?

A

The renunciation of a bilateral contract before performance is due is an anticipatory breach which gives the non-breaching party several options (one of which issuing immediately for anticipatory repudiation

37
Q

What is Promissory estoppel

A

is an equitable remedy used in situations where your remedy at law is unjust (there is no indication from the facts in this problem that promissory estoppel would apply).

38
Q

What is accord and satisfaction?

A

applies in circumstances where there is an unliquidated debt and there is a good faith offer to settle this disputed debt.

39
Q

What depreciation method do residential and nonresidential real property use?

A

Mid-month convention

40
Q

Are consulting fees and director fees included in self employment income?

A

Yes

41
Q

In an S corporation is a loan included in calculating basis?

A

No

42
Q

What are the two cases where you have to pay the deficiency before the trial?

A

In cases tried in the federal district court and the US court of federal claims

43
Q

This form can be used to amend returns or claims of refund taxes that were erroneously paid

A

1040x

44
Q

who is responsible for electing officers?

A

The board of directors

45
Q

Who is responsible for electing board members?

A

Shareholders

46
Q

When are rental losses from active participation partially deductible?

A

When AGI is less than $150000

47
Q

For income to be taxable on a tax return, it must be…

A

both realized and recognized

48
Q

What is taxable income and how is it related to charitable contributions?

A

Taxable income is calculated before the deduction of: any charitable contributions, the drd, and any capital loss carryback. Its related to charitable contributions because you use the taxable income for the 10% maximum deduction of their taxable income

49
Q

he primary activity of most 501(c)(3) private foundations is

A

making grants to other charitable organizations and individuals.

50
Q

Are compensatory damages taxes?

A

Yes

51
Q

If a member of an LLC dies what happens to the LLC?

A

It is dissolved unless the other members consent to continue

52
Q

What is strict liability?

A

The concept of strict liability normally ap­plies to merchant sellers. Strict liability provides that a merchant seller is strictly liable for the physical harm or property damage experienced by the ultimate consumer if the product was in a defective condition and unrea­sonably dangerous to the user.

53
Q

When disposing of personal property are losses allowed?

A

No, losses are not deducted but gains are fully taxable

54
Q
A

Reg (9 decks)

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