ITX - 43A Flashcards

1
Q

(43.1) Charitable contributions will reduce taxable income for clients whose total itemized deductions exceed the ___ deduction.

A

standard

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2
Q

(43.1) Only gifts to ___ organizations are deductible. Donations to ___ are not.

A
  • tax-exempt

- individuals

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3
Q

(43.1) Examples of private charities

A
  • veterans organizations
  • fraternal orders
  • private foundations
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4
Q

(43.1) Examples of public charities

A
  • churches
  • schools
  • hospitals
  • governmental entities
  • Red Cross
  • Salvation Army
  • United Way
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5
Q

(43.2) If a taxpayer wants to donate funds to charitable causes but has not yet selected specific charities, the taxpayer can contribute funds to a ___ fund.

A

donor-advised fund

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6
Q

(43.2) The donor-advised fund provides the taxpayer with the up-front charitable deduction and the ability to ___.

A

spread out charitable gifts over a period of years

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7
Q

(43.2) The deduction for charitable gifts of cash to public charities is limited to ___% of the donor’s AGI.

A

50%

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8
Q

(43.2) For cash gifts to private charities, the limit is the lesser of ___% of AGI or the difference between ___% of AGI and donations to public charities.

A
  • 30%

- 50%

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9
Q

(43.2) Travel for charitable purposes may be deducted by the donor based either on a rate of ___ cents per mile or on actual expenses for gas, oil, interest, and taxes on the car.

A

14

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10
Q

(43.2) Appreciated Property: The deduction for gifts of property is generally the ___ of the property on the date of donation. This rule applies to gifts of appreciated capital gain property (held more than one year) if it is ___.

A
  • FMV

- intangible

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11
Q

(43.2) Appreciated Property: The deduction for gifts of TANGIBLE property is ___, if it is not used in the donee’s charitable purpose, or ___, if it is used in the charitable purpose.

A
  • the donor’s basis

- FMV

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12
Q

(43.2) Appreciated Property: Gifts of ordinary income property such as inventory, copyright work in the hands of the creator, and capital gain property held less than one year provide a deduction of only ___.

A

the donor’s basis

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13
Q

(43.2) The deduction for gifts of property is limited to __% of AGI for gifts to public charities and __% of AGI for gifts to private charities. The limit can be extended to __% of AGI for gifts to public charities of appreciated capital gain property if the amount of the gift is reduced to only the donor’s basis.

A
  • 30%
  • 20%
  • 50%
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14
Q

(43.3) Any charitable contribution that is disallowed because of the limitation with respect to AGI is carried forward for __ years and may be deducted on future returns.

A

5

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15
Q

(43.3) Partial-Interest Gifts to Charity: Generally, gifts to charity of less than an entire interest in property will not be ___. Exceptions include property held in a ___.

A
  • deductible
  • charitable lead trust or charitable remainder trust, remainder interest in a residence or farm, and other property if that is the donor’s entire interest.
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16
Q

(43.3) Nondeductible contributions: No deductions is allowed for a donor’s contribution of __ to a qualified charity or for donations of the __ of property.

A
  • time

- use

17
Q

(43.3) Nondeductible contributions: No charitable deduction is allowed for a transfer to a charity of a ___ life insurance policy if the charity directly or indirectly pays the premiums on the policy covering the donor.

A

split-dollar

18
Q

(43.4) When gifts of property are claimed as deductions in excess of $___ and are not publicly traded stock or cash, a donor must obtained a ___ for each item donated and must include a copy of the appraisal with his or her tax return.

A
  • $5,000

- qualified appraisal

19
Q

(43.4) Appraisals: If the donation is of nonpublicly traded securities, an appraisal is not needed until the donation exceeds $___.

A

$10,000

20
Q

(43.4) Substantiation Requirements: For gifts of cash under $__, a cancelled check will satisfy the substantiation requirements.

A

$250

21
Q

(43.4) Substantiation Requirements: For noncash contributions over $___, in addition to the written acknowledgement from the charity, Form ___ must be attached to the donor’s return.

A
  • $500

- Form 8283

22
Q

(43.4) Substantiation Requirements: If a taxpayer donates a vehicle worth $___ or more, the charity must report the gross proceeds on the sale of the vehicle to the taxpayer

A

$500

23
Q

(43.4) When a charitable contribution is made that is directly related to the donor’s business, and there is a reasonable expectation of a financial return on the amount given, the cost may be taken as a ___ deduction rather than as a ___ contribution. The contribution would not be subject to the __ limitation for C corporations and would not be a separately stated item for pass-through entities.

A
  • business
  • charitable
  • 10%
24
Q

(43.5) Deductions and Calculations - Public Charities: Cash donations

A

up to 50% of the donor’s AGI

25
Q

(43.5) Deductions and Calculations - Public Charities: Long-term capital gain property (appreciated property)

A

up to 30% of the donor’s AGI or 50% of AGI if valued at the donor’s basis

26
Q

(43.5) Deductions and Calculations - Public Charities: Property producing ordinary income when sold

A

up to 50% of the donor’s AGI

use basis when calculating deductions

27
Q

(43.5) Deductions and Calculations - Private Charities: Cash donations

A

up to 30% of the donor’s AGI

28
Q

(43.5) Deductions and Calculations - Private Charities: Long-term capital gain property (appreciated property)

A

up to 20% of the donor’s AGI

29
Q

(43.5) Deductions and Calculations - Private Charities: Property producing ordinary income when sold

A

up to 30% of the donor’s AGI

use basis when calculating deductions