Questions Flashcards
(24 cards)
What is the minimum amount of expected taxes owed when individuals make estimated tax payments?
$1,000
What is the minimum period of time that mutual funds need to be held so that the taxable capital gain distributions are considered long-term?
Mutual fund distributions are always considered long-term.
Which IRA does not include nondeductible contributions and does not have the need to calculate a basis?
Roth IRA
When it comes to Hobby Income, if an individual is not in the business to make a profit, then how would the income related to a sale be treated?
The income would be treated as a capital gain.
What is the basis threshold for a couple filing jointly?
$32,000
If an unmarried individual dies at the age of 45 and had a traditional IRA with his nephew as the beneficiary. What option is not a possible distribution?
He could not rollover the inheritance into an existing IRA. Only a spouse would be able to rollover an IRA as their own.
How is the basis of an asset determined?
By the cost it takes to acquire property unless it is inherited or gifted.
At what point does the holding period begin for an Employee Stock Purchase Plan (ESPP)?
The day after the option is exercised
What is used to determine the basis of property inherited from a deceased individual?
The fair market value on the date of death.
If an individual taxpayer has unreimbursed medical expenses, what is the maximum allowable deduction for the expenses?
A taxpayer can only deduct amount that exceeds 7.5% of adjusted gross income.
step 1: AGI X 7.5% = X
step 2: Amt of expenses - X = max allowable deduction
When does a donation require a documented receipt?
Only donations over $250
How much of the cost for points is eligible for deduction in the year of a refinance?
The term of the new loan divided by the cost of the points required to obtain desired rate.
What is the total allowable real estate tax deduction of a primary residence and foreign real estate?
Foreign real estate tax is no longer allowable.
Up to $10,000 real estate tax of a primary residence is allowed to be deducted.
All of the following are classified as qualifying charitable organizations except:
-nonprofits for the purpose of religion, education, federal government entities, hospitals, amateur sports competition organizations, or gifts to political groups
Gifts to political groups
If the President declares a federal disaster, how do you determine the personal casualty loss deduction?
The lessor of the decrease of FMV or adjusted basis at time of event. THEN further reduced by $100 and 10% of the loss of AGI.
Nonresident aliens are eligible to deduct all of the following except:
charitable contributions, casualty and theft losses, real estate taxes, mortgage interest deductions
Mortgage interest deductions
At what amt does phase out begin for a married couple filing jointly who have a child eligible for the Child Tax Credit? And what happens if they are over the threshold?
$400,00 - then less $50 per $1,000 increase over the threshold.
ex. $410,000 = 10 x 50 = $500.
$2,000 - $500 = $1,500
How do you calculate how much a couple qualifies for as a result of the Additional Child Tax Credit?
After Child Tax Credit is applied, the credit is the lessor the the two: 15% of the taxable Earned Income that is over $2,500 or the amount of unused CTC. (which is $2,000 per qualifying child - tax liability)
What is the maximum amount for Lifetime Learning Credit?
20% of up to $10,000 of education expenses that are paid DIRECTLY to institution for tuition, books, supplies and other payments.
Is a taxpayer eligible to claim an adoption credit for the adoption of a son/daughter of a spouse from a previous marriage?
no
Is an individual with investment income of $4,000 eligible for the Earned Income Credit?
No, Investment Income cannot be more than $3,600.
If an individual has an ITIN, are they eligible for the Earned Income Credit?
No, they must have a valid SSN. An ITIN only is used for the individual to file taxes.
The Retirement Savings Contribution Credit is also referred to as what?
Saver’s Credit
What does the Saver’s Credit allow?
A credit of a certain percentage of qualified retirement savings based on adjusted gross income.
