R1 Flashcards
What form must be used to get the automatic six-month extension for invidiviudal taxes?
Form 4868
In order to be a qualifying winder for filing statius, what two requeirments must be met?
1.) Spouse’s death must have occurred within the last 2 yrs 2.) must maintain a household that for the whole taxable yr was the pincipal place of abode of a sun, stepson, daughter, or stepdaughter
An invidviudl must maintain a home as a household for more than how long to qualfy has a head of household for filing status?
Over half a yr
What dependents qualfiy for the head of household (aka the ones that count)?
1.) a dependent son or darghter (or decesedent), note must live with the filer 2.) father or mother, note NOT required to live w/ 3.) dependent realtives note must live with taxpayer and cannot be cousins, foster parents, and unrelated dependents
When can a married taxpayer filing separetly claim the personal excemption of their spouse?
1.) the spouse has no gross income 2.) spouse was not claimed as a dependent on someone eles’s tax return
What are the two types for dependency exemptions?
1.) qualfying child 2.) qualifying relative
What are the requriments to be a qualifying child for the depednency exemtion?
CARES C-Close relative A-age limit R-Residence and filing requirements E-Eliminate gross income text S-Support test changes
What are the requriments to be a qualifying relative for the dependency exmeption?
SUPORT S-Support (over 50%) test U-Under a specific amount of (taxable) gross income test P-Precludes dependent filing a joint tax return test O-Only citizens (redisdnes of US/Canda or Mexico) test R-Relative test T-Taxpayer lives with individual for whole yr test
How long must a qualifiing child live with the taxpayer in order for the taxpayer to get the depedncy exemption?
More than half of the tax yr
What are the 4 different types of income “baskets”?
1.) Ordianry 2. Porfolio 3. Passive 4. Capital
What is portolio income?
Interest and dividnes
What is passive income?
When the taxpayer does not actively participate. Rental activity is a HUGE passive income type. Remember only passive losses may offset passive income
When does fringe benefits become taxable income to the taxpayer?
When is is lift insuarce and the company pays the premiums and the premiums must be 50,000
When can there be no penaly for premature withdrawls from IRA?
HIM DEAD D-Home buyer (first time 10,000 max) I-Insuarnce for medical (unemployed w/12 consecutive wks of no job) M-Medical expenses in excess of 7.5% AGI D-Disability (NOT temporary though) E-Education (college tution, books, fees, ect) A-and (used as filler) D-Death]
If passive acitiving loss (PAL) exist when happens at the end of the taxyear?
It is carried in suspension, which will offset passive income in future yrs. If still unused when the propery is disposed of then it becomes fully tax deducitble in that yr.
Under what conditions can a PAL be ducutibed for rental activity losses?
1.) Mom and pop eception, 25K max and the ppl must e actiely participating/magnaging and own more than 10% of the rental activity 2.) Real estate professional (aka real estate person”): must have more than 50% of taxpayer’s personal services durying the yr are performed in real property businesses AND taxpayer peforms more than 750 hours of services in real property bussinesse during the yr
What is real property?
Land an all items permantently affixed to the land
What is personal property?
All protpery that is not classfied as real property
What is a capital asset?
They include propery (real and personal) held by the taxpayer
When is a gain not taxed?
HIDE IT H-Homeowners Exclusion I-Involuntary Conversion D-Divorce property setelemtn E-Exchange of like Kind I-Installment Sale T-Treasury Captioal and stock
When doe losses become nondeudctibe?
WRaP W-Wash sale loss R-Related party transcations (the a is filler) P-Personal loss
