Midterm 2 Code Sections/Forms

Question 1

like-kind exchanges

Answer 1

Section 1031

Question 2

involuntary conversions

Answer 2

Section 1033

Question 3

Wash sales

Answer 3

Section 1091

Question 4

Depreciation and amortization, expensing property under code section 179

Answer 4

Form 4562

Question 5

1231, capital gains, disposition of assets

Answer 5

Form 4797

Question 6

alternative minimum tax for individuals

Answer 6

Form 6251

Question 7

individual income tax

Answer 7

Form 1040

Question 8

child and dependent care credit

Answer 8

Form 2441

Question 9

extension for individual income tax return

Answer 9

Form 4868

Question 10

extension for corporate income tax return

Answer 10

Form 7004

Question 11

itemized deduction

Answer 11

Schedule A (Form 1040)

Question 12

interest and dividends income

Answer 12

Schedule B (Form 1040)

Question 13

sole proprietorship income

Answer 13

Schedule C (Form 1040)

Question 14

capital gain income and disposition of assets

Answer 14

Schedule D (Form 1040)

Question 15

rental income, partnership income

Answer 15

Schedule E (Form 1040)

Question 16

self employment income

Answer 16

Schedule SE (Form 1040)

Question 17

partnership and LLC income

Answer 17

Form 1065

Question 18

partner’s distributive share for partnership or LLC

Answer 18

Schedule K1 (Form 1065)

Question 19

Corporate income tax return

Answer 19

Form 1120

Question 20

S corporation tax return

Answer 20

Form 1120-S

Question 21

S corporation election, won’t need to know for this test

Answer 21

Form 2553

Question 22

reconciliation of book and taxable income for small businesses

Answer 22

Schedule M-1

Question 23

reconciliation of book and taxable income for large businesses (assets > $10 mil)

Answer 23

Schedule M-3

Question 24

no gain or loss on transfers to controlled corporations

Answer 24

Section 351

Question 25

loss deduction limited to the amount at risk

Answer 25

Section 465, section 4

Question 26

defines charitable organizations (nonprofits)

Answer 26

Section 501(c)(3)

Question 27

nonprofit income

Answer 27

Form 990

Question 28

individual annual income tax form

Answer 28

Form 1040

Question 29

corporate annual income tax return

Answer 29

Form 1120

Question 30

partnership and LLC annual income tax return

Answer 30

Form 1065

Question 31

estates and trusts annual income tax return

Answer 31

Form 1041

Question 32

allows businesses to take an immediate deduction for business expenses related to depreciable assets such as equipment, vehicles, and software
includes bonus depreciation

Answer 32

Section 179

Question 33

MACRS depreciation and bonus depreciation

Answer 33

Section 168

Question 34

depreciable/amortizable properties used in business and held long-term; including machinery, furniture, equipment
net gains are treated as capital gains and net losses are treated as ordinary losses
best of both worlds

Answer 34

Section 1231

Question 35

QBI deduction - provides taxpayers other than corporations a 20% deduction against qualified business income

Answer 35

Section 199A

Question 36

Capitalize overhead expenses ito inventory so that cost of goods sold is greater than cost of inventory, UNICAP

Answer 36

Section 263a

Question 37

Economic substance/business purpose doctrine
A transaction must have a business purpose other than tax avoidance

Answer 37

Section 7701(o)

Question 38

Capital asset definition

Answer 38

Section 1221

Question 39

Grants IRS broad powers to “distribute, apportion, or allocate income” among businesses to clearly reflect the income of each

Answer 39

Section 482

Question 40

Report income from an installment sale on the installment method

Answer 40

Form 6252

Question 41

permits a deduction for all ordinary and necessary expenses paid or incurred in carrying on a trade or business

Answer 41

Section 162(a)

Question 42

Passive activity losses and credits limited

Answer 42

Section 469

Question 43

form for reporting wages to employees and to the IRS

Answer 43

Form W-2

Question 44

everything is taxable income unless specifically excluded

Answer 44

Section 61