Individual Taxation Flashcards
What is standard deduction amount for 1) MFJ
2) Single
MFJ: 12,700
Single:6350
How much is the 2017 personal exemption?
4050
What is the 2017 Personal exemption phaseout?
261500-384400
313800-436300
Who can and cannot use cash basis accounting?
Can: Individuals
Cannot: 1) Corporations
2) Partnerships with a C-Corp Partner
3) Any business with inventory
What are some AGI deductions?
- MSA/HSA Contributions
- Teacher Expenses
- Moving expenses
- Deductible part of self employment tax
- Self employed SEP ( traditional IRA)
- Self employed health insurance premiums
- investment penalties for early withdrawal
- alimony paid
- ira deduction
- student loan interest ( cannot be someone else’s dependent)
- Qualified tuition and fees
What is the formula for gross income
Total income - exclusions
How do capital carryovers work?
back 3 years and forward 5 years
Describe the corporate charitable contribution limit
10% ( any amount over 10% may be carried over 5 years)
Describe the DRD %
Less than 20% ownership (70%)
20 80% ownership (80%)
80% or more (90%)
What is the tax rate for qualified service corporations
35% flat
What is the corporate AMT?
20% in excess of 40,000
If a corporation’s tentative minimum tax exceeds the regular tax, the excess amount is
payable in addition to the regular tax
What is the corporate AMT threshold amount and excess?
150,000 -> 15%
What is small corporations AMT amount?
Any small corporations ( receipts under 7.5 million) are exempt for a three year period average)
How do personal holding companies account for dividends?
They include 1) actual paid dividends 2) consent dividends
What is the tax rate for PSC?
35%
Give me a brief understanding of what is a Personal Service Corporation ( PSC)
Perform services in field of health, law, engineering, architecture, accounting, consulting
- cannot deduct passive losses against active or portfolio income
Describe Corporate NOL
Carry back 2 years, carryforward 2 years
Give me some rules about Entity/Owner transaction rules
- Tax free contributions to form corporations
- Property must be contributed by investors to form corporation
- Investors must only receive stock
- investor receives NO gain or loss if only receive stock of corporation
Give me some more rules about entity transaction rules
- if stockholder receives cash or other property gain is less of A) gain realized or B)boot recieved
- new corp takes the adjusted basis of the contribution shareholders
What is the formula for determining shareholder basis in stock?
Adjusted Basis of property transferred + GAIN recognized - boot received (including any transferred liabilites) - election to adjust for property loss
When is gain or loss not recognized in a property transfer
when the corporation is owned by 1 or more person in exchange for stock and immediately after the exchange, the people are in control of the corporation ( 80% control test)
How do you recognize gain from boot?
the amount is taxable is lesser of boot received or appreciation
What happens when a subsidiary distributes property to a parent corp ( 80% ownership?)
no gain or loss with be recognized by the parent -> both receive the same basis
