Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CGT > Memo > Flashcards

Memo Flashcards

1
Q

Charitable Contributions - Deductible

A
  • Money or property to:
    • Religious
    • Governments, if contribution is solely for public purposes
    • Nonprofit schools and hospitals
    • Public parks and recreation facilities
    • Salvation Army, Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts, Girl Scouts, Boys and Girls Clubs of America, and etc.
    • War veterans’ groups
  • OOP for a student living with you, sponsored by a qualified organization
  • OOP serving a qualified organization as a volunteer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Charitable Contributions - Nondeductible

A
  • Tuition
  • Value of time
  • Value of blood
  • Payments to social organizations
  • Cost of raffle, bingo, or lottery tickets
  • Money or property to:
    • Individuals
    • Lobbying groups
    • Homeowners associations
    • Political groups/candidates
    • Groups run for personal profit
    • Foreign organizations (except certain Canadian, Israeli, and Mexican charities)
    • Civic leagues, social sports clubs, labor unions, and chambers of commerce
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Charitable Contribution - Cash

A

Amount: FMV

Public, Private Operating: 60% AGI

Private Nonop: 30% AGI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Charitable Contributions: Ord. Inc. & STCG prop

A

Amount: min(FMV, adjBasis)

Public, Private Operating: 50% AGI

Private Nonop: 30% AGI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Charitable Contribution: LTCG Intangibles

A

Amount: Elect either FMV or basis

Public, Private Operating:

  • FMV: 30% AGI
  • basis 50% AGI

Private Nonop:

  • FMV: 20% AGI
  • basis 20% AGI
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Charitable Contribution: Tangible (related use)

A

Amount: Elect either FMV or basis

Public, Private Operating:

FMV: 30% AGI

basis 50% AGI

Private Nonop:

basis 20% AGI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Charitable Contribution: Tangible (unrelated use)

A

Amount: min(adjBasis, FMV)

Public, Private Operating:

50% AGI

Private Nonop:

20% AGI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Charitable Contribution: Real Estate

A

Amount: Elect either FMV or basis

Public, Private Operating:

FMV: 30% AGI

basis 50% AGI

Private Nonop:

basis 20% AGI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

A SEP is a type of

A

IRA

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Incidental Benefit Rule

A

Stipulates no greater than 50% of the employer contributions may be used to purchase whole life insurance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Deductible portion of self-employment tax

A
  1. Deduction for AGI for 6.2% of OASDI up to SS wage base ($137,700) and 1.45% of Medicare (with no earnings limit) for a total of 7.65%
  2. Tax is based on net income from self-employment.
  3. No tax if self-empl. net earnings less than $400
  4. Where self net income <= base
    1. Calculate self-employment income.
    2. Multiply the net earnings from self-employment by 0.9235 (1 − 0.0765).
    3. Multiply the resulting product by 0.153 (the full self-employment tax rate in 2020).
    4. The shortcut method for SE income at or below the taxable wage base is to simply multiply the amount of self-employment income by 0.1413 (0.9235 × 0.1530).
  5. For net self-emp > TWB, multiply the taxable wage base by 7.65% and the excess over the TWB by 1.45% and adding the two together
  6. Additional Medicare Tax 0.9% if
    1. Single > $200,000
    2. MFJ > $250,000
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What does “nonrefundable” tax credit mean?

A

Means it won’t result in income.

The tax can be reduced to zero, but not below.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Standard deduction for a dependent

A

Earned income + $350

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

New Comparability Plan

A
  1. DC plan, either money purchase or profit-sharing plan.
    1. More expensive to administer
    2. Type of cross-tested plan
    3. Nonhighly compensated employees must receive certain minimum contribution levels
    4. Contributions favor highly compensated employees
  2. Common design factor is an allocation or contribution formula that results in two groups receiving different levels
    1. For example, the owner/executive may receive full annual additions limit ($57,000 in 2020), and other EE classes may receive less
  3. Type of plan works well where owners are different ages, thus precluding an aged-based plan.
  4. The plan can define EE classifications in a number of ways:
    1. Service with the employer
    2. Job title, such as officer or partner
    3. Employment at a particular division or subsidiary
    4. Compensation level
    5. Age
    6. Class of employee, such as salaried or hourly
    7. Any combination of 1. through 6
  5. Allocations are restricted in that the employer must design the contribution structure in such a way that the plan passes the nondiscrimination tests
  6. In the event the plan fails the nondiscrimination tests:
    1. the plan should have provisions to reallocate or shift contributions from highly compensated employees to selected nonhighly compensated employees to satisfy the nondiscrimination rules; and
    2. it should be designed to increase accrual rates for nonhighly compensated employees one at a time until the nondiscrimination test is passed
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Half year convention

A

When depreciating an asset straight line, assume only 1/2 year for year 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Gain attributable to depreciation

A

1245 gain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Excess of gain over gain attributable to depreciation

A

1231 capital gain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

NOI capitalization approach

A

(Gross inc. - op. & recurr. exp) * (1 - vacancy) / discount rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

FDIC limit for Joint Account

A

Limit applied PER PERSON

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

2033

A

Property owned by decedent

M

Mine!

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

2034

A

doweR and cuRtesy Interests

R

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

2035

A

Law

  • Gift tax on gifts made within three years of death
  • Gifts made within three years of death that would have been included under Section 2036, 2037, 2038, or 2042
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

2036

A

J - just let me keep

Transfers with a retained life interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

2037

A

K - kill

Transfers taking effect at death

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

2038

A

not Final

Revocable trusts

26
Q

2039

A

Pay each year

Annuities

27
Q

2040

A

‘S’pouse incl.

Jointly owned property

28
Q

2041

A

‘TT’

Powers of appoinTmenT

29
Q

2042

A

‘TN’ ?

Proceeds of Life Insurance

30
Q

S-Corp may include non-US citizens

A

Yes

31
Q

S-corp election deadline.

A

15th of 3rd month of current tax year.

(Ides of March to a calendar year S-corp)

Extensions permitted if reasonable cause

32
Q

Special taxes for S-corp

A
  1. Built-in gains tax
  2. LIFO recapture tax
  3. Excess net passive income tax

All paid by S-corp, not by shareholders!

33
Q

AMT Tax Credit

A

AMT may be used as credit against regular tax in future years

Carried forward, not backward

34
Q

AMT Exclusion items

A
  • Std./Itemized deduction
  • A portion of the exclusion of gain from qualified small business stock (S 1202) acquired before September 28, 2010
  • Tax-exempt interest treated as a tax preference for AMT
  • Percentage depletion treated as a tax preference for AMT
35
Q

Sect. 179 expense

A

May write off cost of tangible personal property used in a trade or business.

Not income-producing (ie, inventory)

Max $1,040,000 / yr

36
Q

Functional use test

v

Taxpayer use test

A

Functional: Use must be the same

Taxpayer: Used in similar endeavor

37
Q

1231 asset

A

Certain assets used in a taxpayer’s trade or business that are held for the long-term

Included: depreciable tangible and intangible personal property, real property, timber, certain livestock, and unharvested crops

Not included: inventory, copyrights and property held for sale to customers.

38
Q

1231 losses

A

Ordinary!

39
Q

What can never be depreciated for income tax purposes?

A

Land

40
Q

Exception to the 10% penalty for higher education expenses applies only to

A

IRAs

(not qualified plans)

41
Q

Min. hours for SEP elig

A

0

42
Q

Are rollovers permitted from eligible 457 to 401(k) and 403(b)?

A

Yes

43
Q

How long must a person participate in a SIMPLE IRA prior to rolling over into a traditional IRA?

A

2 years

44
Q

SIMPLE IRA early withdrawal penalty

A

25% first two years

45
Q

SIMPLE 401(k): after-tax deferrals permitted?

A

No

46
Q

HEMS

A

Health, Education, Maintenance, Support

Permitted feature in a bypass trust; allows spouse to invade principal for these four motivations

Trust NOT included in surviving spouse’s GE

47
Q

Reverse QTIP

A

Under GSTT rules, QTIP property included in the surviving spouse’s gross estate is considered transferred by the surviving spouse, not by the decedent. Therefore, if a decedent transfers property into a QTIP trust, and the trust beneficiaries are grandchildren, the decedent will not be allowed to use his GSTT exemption. The surviving spouse would be required to use her GSTT exemption at death.

  1. The reverse QTIP election is a special election available for GSTT purposes. The election treats the QTIP property as if the QTIP election was not made for GSTT purposes
  2. Marital deduction will still be available
  3. Often made to use a decedent’s GSTT exemption
48
Q

Gift of remainder interest

A

Future interest

Not eligible for annual exclusion

49
Q

Deduction up to $25,000 of losses from real estate activities against active and portfolio income reduced by

A

50% taxpayer’s AGI in excess of $100,000

50
Q

Deductibility of passive losses by C corp

A

100%

51
Q

Sprinkling (spray)

A

The power of directing income at the trustee’s discretion to the beneficiary (trustee can choose when and how much)

52
Q

Crummey right of withdrawal limit

A

Min{5%, annual gift limit ($15,000)}

53
Q

2503(b) distribution of income

A

Manadatory

54
Q

Code of Ethics (6)

A
  1. Act with honesT, integriT, compeTence, and diligence.
  2. Exercise due care.
  3. Maintain the confidentiality and protect the privacy of client information.
  4. Act in the client’s best inteRests.
  5. L:Avoid or disclose and manage conflicts of interest.
  6. Just Act in a manner that reflects positively on the financial planning profession and CFP® certification.
55
Q

Depreciation recapture rate

A

Min(marginal rate, 25%)

56
Q

Stock distributions from qualified plan

A

If he receives employer stock certificates in a lump-sum distribution from a qualified plan, only the original cost basis of the stock is taxable at the time of distribution.

The net unrealized appreciation (NUA, which is the appreciation of the shares while inside the employer retirement plan) would not be taxed until the stock was subsequently sold

57
Q

Tax on gain from sale of 1250 property

A

@25%, to the extent of accum deprec

rest @LTCG rate

58
Q

Original Issue Discount (OID)

A

OID typically applies to zero-coupon or deep-discount bonds.

  1. Interest is usually accrued and includable in income despite an absence of cash flow It is often referred to as phantom income, which is income that is taxable but not received in cash or property at the time of recognition for income tax purposes
  2. The sale of an OID bond will result in capital gain or loss if the sale proceeds are different from the adjusted tax basis
  3. The accrued interest reported each year by the taxpayer is added to the basis
59
Q

Durable vs Nondurable

A

Durable survives the person’s incapacity

Nondurable does not

60
Q

1231 asset

A

Certain assets used in a taxpayer’s trade or business that are held for the long-term

Included: depreciable tangible and intangible personal property, real property, timber, certain livestock, and unharvested crops

Not included: inventory, copyrights and property held for sale to customers.

61
Q

1231 losses

A

Ordinary!

62
Q

What are NOT capital assets?

A

A-C-I-D

  • A/R (
  • Copyrights and creative works
  • Inventory
  • Depreciable prop or RE

A, C, and I are ordinary income assets

CGT (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions