Individual Taxation Flashcards

1
Q

Cash Basis. Note: This basis is NOT allowed for Corporations, Partnerships with a C-Corp partner, or for inventories.

A

Individual Taxation

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2
Q

*MSA/HSA contributions
*Investment penalties for early withdrawal
*Self-employed medical insurance premiums
*Self-Employment Tax (approx. 50%)
*IRA Contributions
*Student loan interest (can’t be another taxpayer’s dependent)
*Moving expenses
*Alimony
*Tuition - can’t take AOC/Lifetime Learning Credit for same expense
*Teacher expenses
*Attorney fees in discrimination lawsuit

A

Individual Taxation

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3
Q

Investment interest expense in excess of investment income
Charitable contributions
Excess Section 179
Capital losses
AMT Paid
Passive Activity Losses

A

Individual Taxation

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4
Q

No carryback

Can carry forward indefinitely

A

Individual Taxation

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5
Q

Carry forward to next year.

Use in any year is limited to taxable income.

A

Individual Taxation

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6
Q

Indefinitely.

A

Individual Taxation

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7
Q

Can be carried forward 5 years.

A

Individual Taxation

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8
Q

It can be carried forward indefinitely.

It may be applied against future regular income tax, but not against future AMT tax liability.

A

Individual Taxation

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9
Q

$3,000 net capital loss can be taken in each year, the rest is carried forward indefinitely.

The loss retains its character (STCL or LTCL).

A

Individual Taxation

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10
Q

Corporate capital loss carryovers may be carried back 3 years and forward 5 years. Individual capital losses are carried forward indefinitely.

Individual capital loss carryovers retain their character (STCL or LTCL). Corporate loss carryovers are carried forward as STCL only.

A

Individual Taxation

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11
Q

Gross Profit / Contract Price

A

Individual Taxation

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12
Q

Contract Price = Sales Price - Liability assumed by buyer

A

Individual Taxation

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13
Q

$1,000,000

A

Individual Taxation

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14
Q

$100,000

A

Individual Taxation

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15
Q

$25 per person for gifts

Service awards up to $400

A

Individual Taxation

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16
Q

They may only offset active business income.

Note: W2 wages are considered active business income.

A

Individual Taxation

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17
Q

Only passive income such as rental income or limited partnership income.

Note: Wages are ACTIVE (cannot be offset by passive) and Interest/Dividends are PORTFOLIO (cannot be offset by passive)

A

Individual Taxation

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18
Q

Neither. They are portfolio income.

A

Individual Taxation

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19
Q

Mid-year/Mid-quarter

A

Individual Taxation

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20
Q

For depreciation when 40% or more of all purchases occur in 4th quarter.

A

Individual Taxation

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21
Q

Mid-month

A

Individual Taxation

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22
Q

15 year straight line (S/L)

A

Individual Taxation

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23
Q

Up to $5,000

Amortized over 180 months

Reduced dollar-for-dollar by amount over $50,000

A

Individual Taxation

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24
Q

On Schedule A:

Amounts in excess of 10% of AGI may be deducted

A

Individual Taxation

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25
Accident or disability insurance premiums are not deductible.
Individual Taxation
26
Must be a citizen of North America Must live with you, or if they do not, must be mother/father or a relative closer than a cousin. Benefactor must provide more than 50% support to the beneficiary.
Individual Taxation
27
Foreign INCOME and REAL ESTATE taxes are deductible. Foreign personal property taxes are NOT deductible. Foreign tax assessments are not deductible- they are added to the basis.
Individual Taxation
28
Gross investment income - investment expense in excess of 2% of AGI = net investment income Investment interest expense in excess of net investment income is deductible.
Individual Taxation
29
Investment interest expense on tax-free securities is not deductible.
Individual Taxation
30
They are deductible if they represent prepaid interest on purchase of a new home or improving a home. Refinance points are amortized over the life of the mortgage.
Individual Taxation
31
Deducted at fair market value (FMV), up to 30% of AGI
Individual Taxation
32
Deduction is taken for adjusted basis in the property, up to 50% of AGI.
Individual Taxation
33
No. It decreases the fair market value (FMV) of the property.
Individual Taxation
34
Take the lower of either A) Decrease in FMV or B) Basis in property (call this number GROSS LOSS) GROSS LOSS - insurance proceeds received - $100 - 10% of AGI = Deductible casualty loss
Individual Taxation
35
Deductible in excess of 2% of AGI Continuing Education - if required to keep your job Business travel 50% Meals and entertainment Union Dues Tax prep fees Legal fees to collect alimony Appraisal fees to value casualty loss of charitable contributions
Individual Taxation
36
Medical Casualty Gambling Investment Interest Expense
Individual Taxation
37
Must be resident of North America Under age 19, or under age 24 if a student
Individual Taxation
38
Must be citizen of North America Must live with you, unless mother/father or relative closer than a cousin You must provide more than 50% support to the individual
Individual Taxation
39
Child's unearned income - early withdrawal penalties - $950.00 - Greater than $950 or child's itemized deduction related to unearned income = Amount taxed at parents' rate
Individual Taxation
40
Yes, if they each own a small business. All non-business income is cash basis.
Individual Taxation
41
15.3% of net earnings from self-employment (Note: executor of an estate is NOT self-employment income)
Individual Taxation
42
A tax credit which takes the taxpayer's tax owed on the return below zero, resulting in a refund to the taxpayer. Earned Income Credit (EIC), American Opportunity Credit and the Additional Child Tax credit. Note: the REGULAR child tax credit is NOT refundable.
Individual Taxation
43
American Opportunity Credit - per student Lifetime Learning Credit - per taxpayer Note: The American Opportunity Credit is refundable.
Individual Taxation
44
The lesser of: 90% of current year's total tax 100% of prior year's total tax 110% of prior year's total tax (if AGI is $150,000 or more)
Individual Taxation
45
Deductible: Costs incurred to PRESERVE soil/water Non-deductible: Costs incurred to drain wetlands or prep for irrigation (i.e. improve land)
Individual Taxation
46
MACRS 150
Individual Taxation
47
90 days
Individual Taxation
48
10 days
Individual Taxation
49
3 years, generally 6 years if 25% or more of gross income was omitted The clock starts on the LATER of the due date or the filing date of the return. There is NO STATUTE OF LIMITATIONS for either fraud or failure to file a required return.
Individual Taxation
50
It is treated as a STCL
Individual Taxation
51
Refunds must be claimed within 3 years of the return due date or within 2 years of being paid, whichever is later.
Individual Taxation
52
Premiums paid by an employer for coverage in excess of $50,000 per employee are includable in income.
Individual Taxation
53
When they are not in return for services rendered, AND The money is used *only* for tuition and books Note: Scholarships for room and board are includable in income.
Individual Taxation
54
State & municipal bond interest US EE Savings Bond interest (note: HH bond interest is taxable)
Individual Taxation
55
S-corporation (actually distributions) Life insurance
Individual Taxation
56
Up to 85%
Individual Taxation
57
Yes.
Individual Taxation
58
Payments made to make you whole are NOT taxable (i.e. to pay for losses of property, body parts or earning ability) Any payments for punitive damages ARE taxable.
Individual Taxation
59
No - similar to an award for damage to make a person whole.
Individual Taxation
60
Alimony IS taxable. Child support and divorce property settlements are NOT taxable.
Individual Taxation
61
NO, they are not deductible. However tax benefits are available through the adoption CREDIT.
Individual Taxation
62
2nd Year: (3rd year - 2nd year - $15,000) 1st Year: 1st Year Alimony Paid - Avg alimony paid in 2nd & 3rd years - $15,000 - Recapture from 2nd year =1st Year Alimony Recapture Total Recapture = 1st Year Recapture + 2nd Year Recapture
Individual Taxation
63
Can be carried back 2 years If any left, can be carried forward 20 years.
Individual Taxation
64
Traditional IRA = deductible Roth IRA = not deductible
Individual Taxation
65
They must be married at the end of the year. If one spouse dies, they must be married at the end of the year.
Individual Taxation
66
Must have a dependent child Must provide more than 50% of the child's support Must live with them more than 50% of the year
Individual Taxation
67
Must have a dependent child. Essentially gets MFJ status for the year of death + 2 tax years
Individual Taxation