practice tests Flashcards
An employer may take a credit against the federal unemployment tax an equal amount up to
5.4%
foreclosure of property with a nonrecourse, secured loan is treated as a
sale of property -( so its just the selling price - fmv)
what entities are eligible for QBI?
“flow through US entities”
including: individuals, partnerships, scores, most LLCs and trusts
what companys would qualify as an “specified service trade or business” (SSTB)?
any company involved in:
- health
- law
- accounting
- actuarial science
- performing arts
- consulting
- athletics
- financial services
(any other business is a QBI)
3 categories of QBI limitations
Category 1- less than
category 2 - greater than
category 3 - in between NOT TESTED
the numbers will be given in a TBS
what are the rules/steps to compute QBI deduction for category 1 QBI?
it is 20% of the ordinary business income from the company
what are the rules/steps to compute QBI deduction for category 2 QBI?
if QTB –> full-wage and property limitation applies
if SSTB –> no QBI deduction allowed
What are the steps to stove “full wage and property limitation” for category 2 QBI?
Step 1: Calculate tentative QBI (20%)
step 2 calculate full wage and property limitations which is the greater of:
Calculation A: 50% of taxpayers shares of QTB w-2 wages
Calculation B: (50% of taxpayers shares of QTB w-2 wages) + (2.5% of property distributions)
step 3:
lesser of step 1 or step 2 amount
What is the total QBI deduction?
Lesser of 20% of Taxable income in excess of net capital gains
or
combined QBI deductions
the basic claimants in order of priotity
- secured claimants
- priorotty claimants
- general creditors who filed their claim
where the seller is not a merchant, risk of loss passes to the buyer upon
tender of delivery of the goods
a financing statement must contain
the name and mailing address of the debtor andsecured party, an indication of the collateral covered by the financing statement, and IF the financing statement covers collateral related toreal proprty a description of that real property
section 179 rules
a. dollar for dollar phase out begins when purchases exceed $3,050,000
b. maximum section 179 deduction: $1,220,000
c. cannot use section 179 to create a loss or if there is a NOL
d. section 179 does not apply to land
compensatory damages -
an award of money to a nonbreaching party to enable him or her to obtain an equivalent substute performance
specific performance -
a court action filed in a contract case that seeks an order instructing the defendant to act according to the terms of the contract rather than seeking monetary damages. Only available with respect to unique, one-of- akind items and never with personal service contracts
attchment of a security interest requires:
- value given by the creditor
- the debtors having rights in the collateral
- an agreement to create the security interest evidenced either by a written secuirty agreement describing the collateral and authenticated by the debtor or by the creditors taking possession of the collateral
casualty loss calculation:
Start with the lesser of the adj basis or fmv
less; insurance recovery
less $100
less 10% of AGI
MACRS real property rules:
- Land is not depreciated
- ignore the salvage value
- residential real property -> 27.5 year straight line
- commercial real property –> 39 year straight line
- mid-month convention is required (1/2 month first and last month
