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HS 321 > Practice Test Facts > Flashcards

Practice Test Facts Flashcards

1
Q

Taxable Income Calculation

A

Income-AGI deductions=AGI-Standard/itemized deduction-personal exemption=taxable income

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2
Q

Limit of standard deduction for single person

A

12,400

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3
Q

Stopping point of Alimony deductibility

A

12/31/2018

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4
Q

US Treasury Bills Gross Income Treatment

A

Included

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5
Q

Local Municipal Bond Gross Income Treatment

A

Excluded

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6
Q

State Income Tax Refund Gros Income Treatment

A

Included (if took itemized deduction)

Excluded is Standard Deduction

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7
Q

US Stock Dividend Gross Income Tax Treatment

A

Included

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8
Q

Tax Free to Taxable Muni Calculation

A

tax free rate x (1-tax bracket)

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9
Q

Fed Income Tax Treatment of Employer Long Term Care Premiums

A

Excluded even if discriminatory

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10
Q

Nontaxable portion of Group Term Life

A

Up to 50,000

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11
Q

Social Security Wage Base for 2020

A

$137,700

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12
Q

Social Security Tax Percent

A

6.2%

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13
Q

FICA/Medicare Tax Wage Base

A

Unlimited

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14
Q

FICA/Medicare Tax Percent

A

1.45%

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15
Q

Traditional IRA Phase Out Range (MFJ)

A

104,000-124,000

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16
Q

Traditional IRA MAx Contribution Limit

A

6,000

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17
Q

Trad IRA Reduced Limit Calculation

A

Contribution Limit x[(AGI - Lower Limit)/20,000]

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18
Q

HSA over contribution tax

A

6%

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19
Q

HSA Early Distribution/Non-medical expense tax

A

20% (Before age 65)

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20
Q

Carry-over timeframe for Charitable Contributions

A

5 years

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21
Q

Casualty Loss Deductibility

A

0 after 2017 (unless natural disaster)

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22
Q

Post 2017 Mortgage Interest Principal Limit

A

750,000

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23
Q

Deductible Expenses for Donated Items

A

Materials and Expenses (not time or property)

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24
Q

Medical Expense Deductibility

A

Anything over 7.5% of AGI (anything greater is deductible)

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25
Q

Pre-2017 Mortgage Interest Limit

A

$1,000,000

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26
Q

Mortgage Refinance Interest Deducibility

A

If refinancing a pre-2017 loan continues to be $1,000,00. unless you borrow more than principal at time of refinance

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27
Q

QBI Deduction

A

Lesser of 20% of QBI or 20% of taxable income

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28
Q

Rental Property Mixed Use Requirement

A

Property rented for 15 or more days, and personally used for the greater of 14 days of 10% of rented days

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29
Q

Rental Property Non Taxable Requirement

A

Rented less than 15 days per year

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30
Q

Hobby Income Taxability

A

All income is taxable

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31
Q

Net Operating Loss (NOL) Limits

A

After 2017 80% of income in that year

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32
Q

Executive Compensation Deductibility (Who’s included)

A

CEO, CFO, 3 most highly compensated executives

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33
Q

Executive Compensation Deductibility (Limit)

A

$1,000,000

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34
Q

Executive Compensation Deductibility (What’s Included)

A

Cash compensation, not non taxable compensation (qualified retirement plan)

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35
Q

Child Tax Credit Amount

A

$2,000 per child

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36
Q

Child Tax Credit - Start of MAGI deduction

A

$200,000

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37
Q

Child Tax Credit Reduction Rate

A

$50/$1,000 in excess of $200,000 for Single

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38
Q

Child Tax Credit Age Limitation

A

under but not including age 17

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39
Q

Dependent care credit calculation

A

20% on up to $3,000 per qualifying child

40
Q

Dependent care credit limit

A

20% of 6,000 in expenses for 2 or more children

41
Q

Cost Basis for a business asset

A

All costs, including freight, installation, testing costs, and sales tax

42
Q

STCL or LTCL limit

A

$3,000 (times % tax bracket)

43
Q

Gain Taxation of Inherited Property

A

Automatically shifts to LTCG

44
Q

Social Security Adjusted Base Amount MFS

A

$0

45
Q

Social Security Base Amount MFS

A

$0

46
Q

Calculation of Social Security Taxation (under base amount)

A

Not applicable, not taxed

47
Q

Calculation of Social Security Taxation (between base amount and adjusted amount)

A

Lesser of:

  • 50% of SS Benefits
  • 50% x [MAGI+(50%SS Bene)-Base Amount]
48
Q

Calculation of Social Security Taxation (above adjusted amount)

A

Lesser of:

  • 85% of SS Bene
  • 85% x [MAGI+(50% SS Bene)-Adjusted Base Amount] + Lesser of:
    • between base and adjusted calculation
    • OR $4,500 (single)/$6,000 (MFJ)/ $0 MFS
49
Q

Non-Taxable Determination for Rental Property

A

Rented for 15 days of less

50
Q

Mixed-Use determination for Rental Property

A

Rented more than 15 days
Used by owner for greater of:
- 14 days
- 10% of rental days

51
Q

Rental Activity Determination for Rental Property

A

Rented more than 15 days
Not used by owner for greater of:
- 14 days
- 10% of rental days

52
Q

Non-Taxable Rental Property Impact in Income

A

Income not taxable, expenses not deductible

53
Q

Rental Activity Rental Property Impact in Income

A

Must report income

Can deduct ordinary, necessary, and reasonable expenses (even if a loss)

54
Q

Mixed-Use Rental Property Impact in Income

A

All income reported

Can only deduct expenses to offset income (can’t take a loss)

55
Q

QBI Deduction Tier 1 Requirement

A

Taxable Income less than Threshold Amount

56
Q

QBI Deduction Tier 2 Requirement

A

Taxable Income between Threshold and Phaseout Amount

57
Q

QBI Deduction Tier 3 Requirement

A

Above Phaseout Amount

58
Q

QBI Tier 1 Deduction Calculation

A

Lesser of:

  • QBI x 20%
  • ATI x 20%
59
Q

QBI Tier 2 Deduction Calculation

A

QBIx20% - Greater of:

  • 50% W2 wages paid by business
  • W2 wages x 25% + (2.5% x unadjusted basis on qualified property)
60
Q

QBI Tier 3 Deduction Calculation

A

Lesser of:

  • QBI x 20%
  • Greater of:
    • W2 Wages x 50%
    • W2 wages x 25% + (2.5% x unadjusted basis on qualified property)
61
Q

Qualifications to be classified as alimonty

A
  • the payments are in cash.
  • the agreement or decree does not specify that the payments are not alimony for federal income tax purposes.
  • the payee and payer are not members of the same household at the time the payments are made.
  • there is no liability to make the payments for any period after the death of the payee.
62
Q

Family Loan Interest Income Calculation (less than $100,000)

A

Lesser of:

  • Loanee’s investment income
  • Federal rate - actual rate x loan amount
63
Q

Group Term Life Taxable Portion Calculation

A

{[(Coverage - 50,000)/1,000] x premium} x 12

64
Q

Student Loan Interest Phase Out Range MFJ

A

$140,000-$170,000

65
Q

Student Loan Interest Phase Out Range MFS

A

$0

66
Q

Student Loan Interest Phase Out Range Single

A

$70,000-85,000

67
Q

Short Term Capital Loss Timeframe

A

1 year and 1 day

68
Q

American Opportunity Tax Credit Phaseout (MFJ)

A

$160,000-$180,000

69
Q

Lifetime Learning Credit Phaseout (MFJ)

A

$116,000-$136,000

70
Q

American Opportunity Tax Credit Phaseout (Single)

A

$80,000-$90,000

71
Q

Lifetime Learning Credit Phaseout (Single)

A

$59,000-$69,000

72
Q

American Opportunity Credit Amount

A

First $2,000 @ 100%
Next $2,000 @ 25%
($2,500 Max)

73
Q

American Opportunity Availability

A

First 4 years of postsecondary education (4 years max)

74
Q

American Opporunity Requirements

A

persue undergraduate or education credential
enrolled at least 50% of time for a year
No felony drug convictions

75
Q

Lifetime Learning Credit Amount

A

$10,000 of expenses @20% ($2,000 max)

76
Q

Lifetime Learning Availability

A

All years of postsecondary or improved job skill learning (unlimited years)

77
Q

Lifetime Learning Credit Requirement

A

Pursue degree or educational credential

Take at least 1 course

78
Q

QBI Threshold and Phaseout (MFJ)

A

$326,600 - $426,600

79
Q

QBI Threshold and Phaseout (Non-MFJ)

A

$163,300 - $213,300

80
Q

Social Security Band (MFJ)

A

$32,000-$44,000

81
Q

Social Security Band (Non-MFJ/MFS)

A

$25,000 - $34,000

82
Q

Social Security Band (MFS)

A

$0

83
Q

Section 179 expense deduction

A

Option to elect to expense property placed in service during the year instead of depreciating over time

84
Q

Section 179 Use Limitations

A

An asset must be used more than 50% of the time. If used less than 100% than only the portion of time used for business can be epxensed

85
Q

Section 179 Limit

A

$1,040,000

86
Q

Section 179 Total Depreciable Property Limit (all property)

A

$2,590,000 (dollar for dollar reduction if above)

87
Q

Straight Line Depreciation Timeline (Real Estate for Residential Rentals)

A

27.5 years

88
Q

Straight Line Depreciation Timeline (Real Estate for Commercial Use)

A

39

89
Q

Personalty

A

Any property other than real property

90
Q

Basis Used for Gifted Stock

A

either FMV at time of gift, or Donor’s original basis (depends on price executed when sold)

91
Q

basis for Gifted Stock sold above FMV/Donor Basis

A

The higher of the two

92
Q

basis for Gifted Stock sold below FMV/Donor Basis

A

The lower of the two

93
Q

basis for Gifted Stock sold below FMV/Donor Basis

A

No gain or loss calculated

94
Q

Additional Deduction Amount and Eligibility

A

$1,300

  • Age
  • Blindness
  • Dependents
95
Q

What compensatory or punitive damages are excluded from income

A

compensatory damages only

HS 321 (3 decks)

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