Mnemonics

Question 1

What is mnemonic for qualifying relative?

Answer 1

C-IRS-Jack you, Citizen;Income;Relationship;Support;Joint filing-no

Question 2

What is the mnemonic for qualifying child?

Answer 2

JARRS- Joint return,no;Age;Residency;Relationship;Support tests

Question 3

What is the acronym for AMT?

Answer 3

SIMPLE-PIE

Question 4

What does SIMPLE-PIE stand for?

Answer 4

Standard deduction;Interest on home equity loans for purposes other than remodel or improve;Medical expenses over 10%;Personal and dependent exemption;Local, state property &personal property tax; Employee business expenses under 2%;Private activity bond interest;Incentive stock options;Excess depreciation on personal property

Question 5

Qualifications for qualifying dependent? DETAILED!

Answer 5

C-IRS-Jack you: Citizen(of USA) or resident of usa, mexico or canada;Income-less than$3950; Relationship or household member–not a cousin;Support - over half of annual support;no Joint return

Question 6

summarize adoption credit-DETAILED

Answer 6

Child must be under 18, or mentally or physically handicapped;expenses can be deducted after adoption is finalized, even in a subsequent year;max is 1
$13,190;credit is nonrefundable

Question 7

What is the mnemonic for Schedule A deductions? What does it stand for?

Answer 7

COMMITT - Charitable contributions; Other miscellaneous; Miscellaneous expenses(2%); Medical expenses; Interest; Taxes; Theft or Casualty loss

Question 8

Describe Section 1245 property.

Answer 8

Tangible non-realty - can be depreciated over 3, 5, 7, 10, 15 or 20 yrs. STRAIGHT line or MACRS.

Question 9

DESCRIBE Section 197 depreciation.

Answer 9

Intangibles - For the most part, intangibles are depreciated straight-line over 15 years.

Question 10

Name Real property depreciation.

Answer 10

SECTION 1250 property-residential rental depreciated over 27.5 yrs, business or investment over 39 years. Straight line. Salvage value ignored. MID-MONTH convention used: all property treated like it is purchased or sold in middle of month.

Question 11

How does MACRS differ from GAAP depreciation

Answer 11

1.) Useful life of the property is shorter, in most cases. 2.) New and Used property treated the same. 3.) Salvage value is ignored.

Question 12

Why is MACRS called a “Modified” type of depreciation?

Answer 12

Because it differs from standard GAAP depreciation.

Question 13

Detail kiddie tax calculation

Answer 13

Child’s unearned income less 1.Early savings withdrawal penalty plus 2.$1,000 plus 3.Greater of $1.000 or total itemized deductions connected directly with production of child’s unearned income