Options Flashcards
Buyer of a Call
Right to purchase security, long, bullish, loss potential is the premium and gain potential is unlimited
Seller of a Call
Obligation to sell the security, short, bearish, gain potential is the premium, loss potential is the stock owned OR unlimited if naked/stock not owned
Buyer of a Put
Right to sell a security, long, bearish, max profit is exercise price - premium paid, max loss is premium paid
Seller of a Put
Obligation to buy a security, short, bullish, max profit is the premium and max loss is exercise price-premium
Lifelong Learning Credit
20% of the first $10k or a max of $2k. Non-refundable
American Opportunity Tax Credit
$2500/eligible student. 100% of first $2000, 25% of next $2000. Refundable 40% of remaining balance up to $1000
Fee Simple
100% included in gross estate
Passes through probate
Income tax basis is purchase price
Inherited basis is FMV at death
Freely transferable
Tenants in Common
Percent owned included in gross estate
Passes through probate
Income tax basis is amount contributed
Inherited basis is FMV of % owned at death
Freely transferable and no survivorship rights
JTWROS
Non spouse estate inclusion is % contributed, spouse is 50%
Not subject to probate.
Income tax basis is purchase price divided equally
Inherited basis is FMV at death of % included in gross estate
Freely transferable; survivorship rights; transfer results in TC
Tenants by the Entirety
50% included in gross estate
Not subject to probate
Income tax basis is 50% of purchase price
Inherited basis is 50% of FMV at death
Transferable with spouse consent; survivorship rights; transfer results in TC
Community Property
50% included in gross estate
Decedent’s 50% subject to probate
Income tax basis is 50% of purchase price
Basis if inherited is 100% of FMV at death (both halves stepped up)
Transferable with spouse consent, no survivorship rights, transfer results in TV
