MyREGNotes Flashcards
Surviving Parent can be taken as personal exemption even if living out of house but
subject to exemption minimum income
Although refunds may not be taxable in CY bz of PY 1040EZ, will int. received count as taxable?
Yes. the sole refund will be excluded but the int. on refund included
Is ordinary income included as self employment income?
No. only income from services rendered. although will be regular income in individual taxpayer
Are int. from municipal bonds included as income?
No. gvt wants you investing in their bonds
Are security deposits income for the receiver?
If kept in a separate acct or refundable, not income. if included as part of rent and not refundable, then is income.
Rental activity income exception
if own 10% or more of activity and AGI
When are passive loss fully deductible?
Only if sold or got rid off, then loss if fully deductible and mix passive w/ active participation. also might mix using $25k max deduct if active participates
What is the max nontaxable allowed for life insurance?
$50k, excess ins included as income
Solvency is based on
FMV of all assets - all liab’s
Annuities
Amount paid allocated over the time not taxable (since is recoverable), the gain is taxable.
Unqualified stk option
classified as ordinary income @ amt if traded on establish mkt rate. option price should not be less than 85% of FMV
Are personal int. expenses deductible?
No. ex: auto loans
Medical expenses and casualty losses relation w/ insurances
Expenses should be netted w/ reimbursement received by insurances. Moving exp. should also be offset w/ reimbursements b4 deduction
What amount is deducted for the purchase of an item for donation to an org?
Dif. of FMV of item and actual amt paid. (excess of FMV is the amt being donated)
Can IRA’s be deductible and credit in the same yr?
True
What amt of state tax refund is included in CY income?
Amt refund up to itemized deduct on PY return
Self EE tax deduction b4 the line or after?
All self EE goes b4 the line
Casualty loss
only includes non controllable/unavoidable to be deducted
Deduction on investment int. exp.
Excess of 2% of AGI up to net investment income (investment income - all investment exp other than inv int exp)
Hobbies not for profit (profit for last 3 of 5 yrs) are
sales included as income and exp (up to income) miscellaneous subject to excess 2% of AGI
Sale, exchange or transfer of worthless stk is treated as
as ordinary loss to the original owners up to $50k
Dividend income recognize for
shareholders when received up to earning, excess is lowering its investment
No G/L are recognize in the exchange of Ccorp stk for which tranx?
formation, reorg (t stk) and resale (t stk)
After a underpymt of a good faith estimate, what actions should be taken
exact amt should be included in the yr known or received
What deductions should be made by personal holding co’s (PHC) before determining amt available for distribution?
Fed taxes and net LT capital G/ less fed taxes. Must include dividends from unrelated as income. Taxes for PHC are added to regular and AMT tax for a total tax
Who may be liable for acc earning tax?
Ccorps regardless of # of stkholders, not for passtrhroughs
dividend paid in pty= income @ FMV up to
CY earning + PY earning + gain on pty
Tax free reorgs
Types A to F
Does Corps needs to file consolidated FS to file consolidated returns?
No need to file cons FS to be able for cons ITax. G/L can offset each other
Does the rules for statute of limitation applies for estimates dif’s?
No. dif. can be included in ITax return when known or received. Rules are for errors or unintentional exclusions.
Can EIC be claim by Ccorps
No. only by individuals w/ dependent
