Module 35 Notes Flashcards
What is Schedule B for?
Interest and dividend income
What is Schedule C for?
Income from sole proprietor
What is Schedule D for?
Capital gains and capital losses
What is Schedule E for?
Supplemental income
Examples: distributive share of partnership or S corporation income, rents and royalties
What is Schedule F for?
Farm income
What is Schedule A for?
Itemized Deductions
What form is used to file an individual’s tax extension?
Form 4868
Maximum social Security benefits that are taxable is…..
85% of what the taxpayer receives
______ stock options are offered to all employees with no discrimination, while ______ stock options are only offered to certain key employees
Incentive
nonqualified
Under an incentive stock option when do you pay taxes
Only when you sell the stock
Under a nonqualified stock option when do you pay taxes
Twice:
1) when you exercise the option and
2) when you sell the stock
Under an incentive stock option when you pay taxes when you sell the stock how is income treated
As a long-term capital gain
Under a nonqualified stock option how do you treat income when you exercise the option
As ordinary income to the extent that the fair market value exceeds the option price
Under a nonqualified stock option how do you treat income when you sell the stock
As a capital gain
T/F
Country nonqualified stock option the option is included in income when received
TRUE
The option is included in income when received if it has a determinable FMV
