Individual Tax

Question 1

Investment income includes

Answer 1

Nonbusiness income from interest, dividends, annuities, royalties, gross income from property held for investment

Net gain on sale of investment asset

Gross portfolio income

Income from interest in activities involve trade business which T not material participate# passive activity

Question 2

Investment income is not

Answer 2

From Rental real estate activity which T actively participates

Question 3

Disallowed investment interest

Answer 3

Carried forward indefinitely

Deductible up to investment income in next yr

Question 4

Interest related to producing tax exempt income

Answer 4

Is not deductible

Question 5

Investment interest income

Answer 5

Allowed to deduct a limited amount as Itemized deduction

Not include qualified residence interest & passive activity interest

Investment interest deduct only to the extent of Net Investment income

Question 6

Dependent child care credit

Answer 6

Max qualified exp=3000/1c or 6000/2c
Credit= 20% to35% * care expense
(Max credit is 35% if AGI 15000- round up
Cares expense

Question 7

Gambling winnings, lotteries

Answer 7

Amount received are included in gross income

Gambling losses are deductible only to the extent of the gambling winnings

Question 8

Jury Duty pay

Answer 8

Compensation received while performing jury duty is included in gross income

Question 9

Foreign income

Answer 9

Exclusion is Limited to the lesser of $99200 or foreign earned income

Bone fide residence: Must be resident full year

Physical presence test: physical present in the foreign country at least 330days in 12months

Question 10

Full exclusion

Answer 10

Inheritance &gifts

Life ins

Personal injury (except lawsuit settlement lost wage included)

Scholarship use for tuition and fees without any service render

Rental value of parsonage.

Question 11

Dependent child care credit

Answer 11

Max qualified exp=3000/1c or 6000/2c
Credit= 20% to35% * care expense
(Max credit is 35% if AGI 45k). 35% Credit deduces 1% by each 2000 AGI>15000- round up
Cares expense

Question 12

Gambling winnings, lotteries

Answer 12

Amount received are included in gross income

Gambling losses are deductible only to the extent of the gambling winnings

Question 13

Jury Duty pay

Answer 13

Compensation received while performing jury duty is included in gross income

Question 14

Foreign income

Answer 14

Exclusion is Limited to the lesser of $99200 or foreign earned income

Bone fide residence: Must be resident full year

Physical presence test: physical present in the foreign country at least 330days in 12months

Question 15

Full exclusion

Answer 15

Inheritance &gifts

Life ins

Personal injury (except lawsuit settlement lost wage included)

Scholarship use for tuition and fees without any service render

Rental value of parsonage.

Question 16

Charitable contribution

Answer 16

Cant get deduction for :

+contribution in cash without receipt

+contribution of other dependent: same for real estate tax and mortgage interest ( only got deduction if own and paid)

Question 17

Gambling loss

Answer 17

Limited to Gambling winning but are not subject to the 2%floor of other Misc deductions

Question 18

Penalty pmt for prepayment of home mortgage is

Answer 18

Deductible as mortgage interest

Question 19

Investment expense

Answer 19

Only be deducted up to net investment income

Net Inv income= Gross investment income-non-interest exp
Interest investment exp only deduct up to Net INV income, the remain exp carry forward against Net Inv income in the future

Question 20

Deductible qualified moving exp include

Answer 20

Actual expenses of moving personal belong

Not include the penalty for breaking the leases