Individual Taxation Flashcards
When is filing status determined?
At the end of the year?
Does income matter for qualifying child test? If so, what is it?
No, but they must be under 18 OR be a full-time college student 19-23
Does income matter for qualifying relative test? If so, what is it?
Yes, cannot earn over $3,000 in taxable income
Alimony received (before/after) December 31, 2018 is TAXABLE as GROSS INCOME
Before = Taxable BUT CAN BE DEDUCTED After = Not Taxable
In order for an award to not be taxable to the individual, what are the two requirements?
- Individual was given award without request
2. Donated to governmental or charitable unit
What is the maximum amount of social security benefits that can be included in gross income?
85%
State muni bonds (are/aren’t) taxable
are NOT
Worker’s compensation (is/isn’t) taxable
is NOT
Child support (is/isn’t) taxable
is NOT
Which is satisfied first when allocated? Child support or alimony?
Child support is first
Employer contributions to a qualified retirement plan are taxable upon (distribution/contribution), and earnings are taxable upon (distribution/receipt).
Distribution for both
The first _______ of group-term life insurance is nontaxable as a fringe benefit.
$50K
Losses from rental of personal property are disallowed if it is rented for ___ days or (more/less).
14 or less
Is R&D included in uniform capitalization rules?
No, but anything related to DL, DM, and FOH is
Prepaid interest must be allocated over the life of a loan for (cash/accrual) basis taxpayers
BOTH!
An employer paying for their own health insurance (is/isn’t) included on Sch C
is NOT
QBI deduction (is/isn’t) allowed for a SSTB over the income threshold.
is NOT
Phase-in amount for QBI
164,900 single x 2 MFJ
Passive losses in the excess of at-risk amounts for an activity are carried forward _______ and are deductible _________
Indefinitely / Against that activity
Passive losses (including suspended ones) can be allocated against other sources of income if….
A partner is disposing of their interest in a partnership
What is the Mom & Pop rule? And what is the phaseout?
If a married couple actively participates in real estate, then they can deduct up to 25k so long as their AGI does not exceed $100k (phaseout between 100-150k - 50 cents on the dollar)
Portfolio income (is/isn’t) passive income
is NOT
A limited partner in a partnership provides what type of passive income?
At-Risk
Individual taxpayers can deduct up to ______ in net capital losses
$3k
Passive recourse liabilities increase which basis?
Tax and At-Risk
Passive nonrecourse liabilities increase which basis?
Tax basis but NOT At-Risk UNLESS it is secured by real property
Parthership loss hurdles (3):
- Tax Basis
- At-Risk Basis
- PAL (up to Passive Gains)
Students can deduct ______ per year of student loan interest payments
$2500
Self-employed health insurance (is/isn’t) deductible
it IS deductible!
Max deductible for a SEP IRA
20% of income after deducting 1/2 of SE taxes
Charitable cash contributions for individuals subject to the 60% limit can be carried _______
Forward 5 years
Qualified residence interest deduction is only deductable…
…when buying, building, or substantially improving taxpayer’s home that secures the loan
Medical insurance premiums (are/aren’t) deductible
ARE
Additional standard deduction amt
1350
Medical expense deduction AGI floor:
7.5% of AGI is the FLOOR
If property is donated and it’s short-term, its max is ___% and measured at _______
50%, lesser of adjusted basis or FMV at time of contribution
If property is donated and it’s long-term, its max is ___% and measured at _______
30%, FMV at time of contribution
The Net Investment Income tax is ___% on the (greater/lesser) of Net Investment Income or excess over AGI
3.8% / Lesser
Child and dependant care credit is ___ of eligible expenses, child must be under the age of ___
Fully refundable up to 8k (1 dependent), 16k max / 13 years - 50% then phaseout to 20% then to 0%
The max child tax credit can be claimed for $_____ each if AGI is beneath a certain threshold
$2,000
Safe harbor for estimated payments applies to AGI in the prior year being over ____
$150k
Unemployment compensation in 2021 can be deducted by ______ for low income
$10,200
Retirement savings contributions credit is temporarily refundable for low-moderate income taxpayers, %’s are ____ and max is $____
50%, 20%, 10% - $2000
Incentive stock options must be held at least ____ year(s) after the grant date, and at least ____ year(s) after exercise date
2 / 1
Employee stock purchase plans cannot be exercised more than ____ months after the grant date.
27
The option price may not be less than ____% of the lesser of the _____ of the stock when granted or excersized
85%
A nonqualified stock option is considered _______ income. If the value is readily ascertainable, it is taxed when (granted/exercised). If there is a cost, it is calculated by _____________.
Ordinary Income
Taxed when Granted
Value minus Cost
A nonqualified stock option is considered _______ income. If the value is not readily ascertainable, it is taxed when (granted/exercised).
Ordinary Income
Taxed when Exercised
ISO’s (are/aren’t) taxable when granted and (are/aren’t) taxable when exercised. They are taxed as a _______ gain or loss when sold.
Aren’t / Aren’t / Capital
Qualified stock options (are/aren’t) deductible for the employer
are NOT
ESPP’s (are/aren’t) taxable when granted and (are/aren’t) taxable when exercised. They are taxed as a _______ gain or loss when sold UNLESS they are sold at a bargain, in which case it’s considered _________
Aren’t / Aren’t / Capital / Ordinary Income
