NewREG Flashcards
Criteria’s for assignable contracts:
all contract rights are assignable except if involves personal services and those materially increasing the risk of the others
What contracts must be in writing if over $500?
only sale of goods under UCC applies the $500 rule. statue of fraud applies to contracts that cannot be fully performed in 1 yr
If merchant firm offer is made to stay open, will it be enforceable even though it changed of minds?
Yes, a merchant offer (not need for offeree to be merchant) under the UCC rules stays for the period of time stated or reasonable time (up to 3mo.’s most of the time). only qty must be included. warranty of title must be specifically disclaim
Fraud in inducement: void or voidable?
voidable, in the execution will be void
Unilateral contracts
a promise in exchange for performance
dif. of sale w/ reserve or w/o reserve
w/ reserve you can take it back whenever you want, w/o reserve must be sold if an offer is made
if person releases the collateral on a promissory note, who will be liable if non performance?
all that transferred after collateral will be release at same time w/ the collateral
holders in due course applicable defenses
not personal defenses(e. consideration) but applies real defenses(fraud)
are the sell of AR considered as a secured tranx
yes. owing the right to those AR’s (if all then then not considered perfected, if less than 1/2 then can be consider perfected). must file FS in order to perfect an inventory collateral as PMSI
Are partners entitle to compensations?
No. only entitle to profits unless otherwise agreed
Dividend income applies as income?
Yes, for dependent exemptions thus not qualified. Social sec not income thus can qualify as dependent.
Are refunds included as income?
interest on PY refunds are included as income not the actual refund, unless itemized PY and up to deduction used
What value of pty received is consider income?
cash or FMV of pty received is considered the income subject to tax
Are municipal bond int income included in income?
No. they are excluded
When does 25k limit of Mom & Pop applies?
when losses from actively participating. Up to 25k to deduct subject to be lowered by half of the excess of $100k
Are residence insurance deductible when for personal use?
No. interest and pty taxes are deductible
If borrow money w/ home as collateral is it deductible?
Yes up to $100k on mortgage int. if not used to buy, build or home improvement. If done for that reason then mortgage up to $1M are full deduct
How to consider gains from lawsuits due to injury?
deductible(not as income)
Are temporary living and meal expense included as moving expense deduction?
Not anymore. just moving your things, transportation and lodging
How to account for services provided to charity
not allowed as charitable contribution deduction
For what amount will be subject to penalty for not paying estimates?
over $1k will be consider for penalty over the amt outstanding
If estimates are used in preparing an IT return, should it be disclose the use of such estimates in the return?
No need to disclose such info
How much can be deduct from the loss of selling, exchange and unworthiness of stk?
Up to $50k can be deducted but only to original owners
Can tax years be reopen after statute of limitations expires?
Not if considered no fraudulent. For fraud it can be looked at w/o limitations
Organizational expenses
for taxes, max deduct $5k if under $50k expense, then divide by 15yrs
how to account for family insurance covered by Scorp?
as income if shareholder
To which entity must a firm register before performing services to SEC clients?
PCAOB
CPA negligent opinion on audit opinion
liable to those he knows will rely on FS
shelf registration of sec.’s
original investment kept updated
strict liability does not applies to
special design products
In order to be attached a sec agreements must
must exist, after can either be signed or take possession. sec agreements are not bound to include the amt of the obligation being secured
Common carrier not liable if? / warehouse liable if
agreed and contracted. by only being negligent. real defenses makes the bill of lading not negotiable
ordinary income from S Corp flowing to k-1?
No, all other income does and capital loss
Is interest income from municipal bond included in gross income of individual?
No, excluded (the ones that are included are refunds, federal and treasury.
Limit for mortgage interest to buy, build or improve
$1M and $100k if not for any of those
Child dependent care rules
must be under 13yrs, up to $3k per child, calculated from lowest income of parents
penalty for amt due after withholding if
over $1k
how many years after for amendments and to claim refunds?
3yrs for amendments and 2 after paid for refunds
when can you depreciate for real pty and personal pty?
mid-mo. for real(27/39) and mid-yr/mid-qtr for personal(3/5/7) pty. (goodwill over 15yrs)
accrual method required for
large c corps, tax shelters, manufacturing, inventory (not for PSC’s)
sell of stkholder interest is considered dividend?
No. will be like a normal sale FMV-AJE for the gain. will not affect PY E&P
The under/over 25% rule applies to
unintentional underreporting of income
organizational exp are?
legal fees, acct services, temp director and incorporated fees to state. dep over 15yrs (like intangibles)
NOL’s exists for who?
individual, c corp and estate/trusts
Who is not subject to Acc EanP tax?
PHC’s
What tax effects does a trade in on old assets have?
No gain is recorded thus no tax effect.
What is excluded from like-kind exchange?
real pty for real pty, partnership int for int, manuf equp for factory bldg
