questions i dont know

Question 1

How much is the tax payer allowed to deduct in terms of investment interest expense

Answer 1

its limited to the net taxable investment income

Question 2

Can you claim a coharitable contribution for services rendered to a charity?

Answer 2

NO

Question 3

How do you handle a donation, say of artwork, that you held for more than one year? or less than one year?

Answer 3

If you hold it for more than a year, you can deduct the FMV up to your limit based on AGI…if its less than a year, its a STCG and can only be deducted for the basis.

Question 4

How long are charitable contributions not fully deducted in the current year carried forward?

Answer 4

5 years yo

Question 5

If you have stock, and vlaues change onver time, and you do a stock split, what basis does it take?

Answer 5

it will take the original basis, spread out over how many shares there now are.

Question 6

What do you do for safe harbor calculations on small companies

Answer 6

if annual gross receipts are less than 10 million during the preceding 3 years, you can deduct up to 2% of the unadjusted basis as long as its under 1 million.

Question 7

What are examples of capital assets

Answer 7

INVESTMENTS such as
Personal car
furniture in home
stocks/securities
personal prop not used in trade/business
interest in a partnership
goodwill
copyrights or intangibles for music PURCHAsssssssssssed

Question 8

how do installment sales work

Answer 8

revenue is reported over the period in which the cash payments are received the amount of cash received is multiplied by the gross profit % to determine revenue.

Question 9

how much of a loss can be used in a year

Answer 9

3000

Question 10

what classifies as 1231 property

Answer 10

depreciable personal and real property used in the taxpayers trade or business and held for over 12 months

Question 11

whats the rule under disposition of tangible depreciable property used in business,?

Answer 11

ordinary income is recognized to the extent of the lesser of the amount of gain realized or the depreciation which was allowed or allowable.

This ordinary income recapture is subtracted from the gain realized on the sale to arrive at the 1231 gain

Question 12

Parent sells son stock and takes a loss, even though the loss is not recognizable, it is disaalowed. but can anything be done with the loss when the son sells the stock

Answer 12

yes if son sells for a gain ,he can offset the gain with the amount of the disallowed loss to the extent of $0.

Question 13

To classify under IRC section 179, what characteristics must the property have

Answer 13

purchased for use in their trade/business….and purchased from an unrelated party.

Question 14

What is included in MACR’s five year property

Answer 14

autos computers copiers and such

Question 15

how much is non taxable for employer reimbursement of education expenses

Answer 15

5,250..anything over is taxed babbbyyy

Question 16

what is not taxed for stuff related to going to college??

Answer 16

Tuition, supplies, and books

Room and board is taxed!!

Question 17

youre asked to find the net earnings for a self employed person given income and the tax rates of SS and Medicare…how do you find their amount of tax and related earnings??

Answer 17

Self employed people are allowed to deduct half of taxes since they pay both employer and employee…they could give us SS tax and medicare…so to find out the taxes paid add up both percents and then divide by two…lets call it 7%…then subtract from 100% so you would then multiply 93% by the SE income to get the net earnings.

Question 18

So youve found net earnings for SE person…how do you find the SE tax…and then how do you find the adjustment on it?

Answer 18

so you found the net earnings by deducting half the taxes listed right? now take that net earnings figure and multiply it by the full taxes this time…thats your SE tax…mulitply by the SE tax by 50% to find the adjustment