INDIVIDUAL TAX

Question 1

The IRS grants the TP an automatic 6 month extension on form _______.

Answer 1

4868

Question 2

Form for Amended Returns

Answer 2

1040X

Question 3

Amended returns due by the later of

Answer 3

1. 3 years after original tax return due date (including extension)
2. 2 years after actual payment of tax

Question 4

Statute of limitations for IRS

Answer 4

• 3 years after later of due date or filing date
• 6 years if total income understated 25% or more
• Unlimited for tax fraud or non-filing of return

Question 5

Businesses that use the cash basis

Answer 5

businesses whose gross receipts don’t exceed 10mil (most individuals, SCORPS, Individually owned partnerships, personal service corporations)

Question 6

Entities prohibited from using cash basis

Answer 6

C corps with gross receipts over 5M, partnerships that have C corps as partner over 5M, tax shelters, certain trusts.

Question 7

Tax Shelter

Answer 7

a financial arrangement meant to avoid or minimize taxes

Question 8

Is Pre-Paid interest deductible?

Answer 8

NO

Question 9

Are state and municipal bond interest taxable?

Answer 9

NO

Question 10

Form to report interest & Dividends income on

Answer 10

Schedule B

Question 11

When are series EE bonds taxed?

Answer 11

When they are redeemed (Unless used for higher education for self, spouse, or dependent)

Question 12

Are life insurance dividends taxable?

Answer 12

NO. Acts as a return on your premium (fewer people died this year, here is some $ back) But interest on Dividend is taxable.

Question 13

Liquidating Dividend

Answer 13

NOT taxed … acts as a return of purchase price

Question 14

Are stock dividends from preferred stock taxable?

Answer 14

YES! At FMV

Question 15

Provisional Income Calculation (used to determine SS benefit Tax)

Answer 15

AGI before SS + Tax-exempt income + One-half of SS Benefits

Question 16

Who gets taxed on SS Income?

Answer 16

A person collecting SS who has less than $25,000 of provisional income can exclude ALL SS Benefits. Tax payers with provisional income over $60,000 are subject to the maximum 85% inclusion.

Question 17

Form for capital assets

Answer 17

Schedule D

Question 18

Form for capital gains and losses

Answer 18

Form 8949 - then report these totals on SCH. D

Question 19

Gift Tax Form

Answer 19

Form 709

Question 20

1231 Assets

Answer 20

Non current business assets

Question 21

Another term for personal loss

Answer 21

Consumption loss

Question 22

Schedule A

Answer 22

Itemized deductions (Personal and Employee Expenses)

Question 23

Schedule B

Answer 23

Interest and Dividend income

Question 24

Schedule C

Answer 24

Profit and loss from a business (Employer expenses/1099 Income)

Question 25

Schedule D

Answer 25

Capital gains and losses (ST and LT investments)

Question 26

Schedule E

Answer 26

Supplementary income or loss (RRF-COP)
Rental income, Royalties (copyrights, oil/gas leases, patents), Flow through entities (S-corp, partnerships, estates & trusts)

Question 27

Schedule F

Answer 27

Profit and loss from farming

Question 28

Foreign tax credit form

Answer 28

1116

Question 29

Depreciation and Amortization form

Answer 29

4562

Question 30

Sale of LT business property (not inventory or receivables - schedule C)

Answer 30

4797

Question 31

Schedules on the face of 1040 to get to AGI

Answer 31

BCDEF (Backside is schedule A)

Question 32

A dwelling unit is used as a home if personal use exceeds the greater of

Answer 32

14 days OR 10% of the number of days rented

Question 33

Alimony Recapture rule

Answer 33

to prevent property settlements from being treated as alimony

Question 34

Form to report contributions to Health Savings Account (HSA)

Answer 34

Form 8889

Question 35

Miscellaneous Expenses (Subject to 2% of AGI)

Answer 35

Business expense of an Employee, Investment expenses (Safety deposit box), Tax preparation Fees

Question 36

Casualty losses that exceed ___ of AGI may be deducted.

Answer 36

10%

Question 37

Form TP must fill out to pay ESTIMATED TAX PAYMENTS (and when are they due?)

Answer 37

1040 ES - due by the 15th of the 4th, 6th, and 9th months of taxable year and by the 15th of January