R2

Question 1

Which costs are required to be capitalized?

Answer 1

DM, DL, OH

Question 2

Which retailers do capitalized costs apply to?

Answer 2

10 MM

Question 3

How are suspended passive activity losses treated?

Answer 3

Suspended passive losses are carried forward, but not back, until utilized

Question 4

How are jury duty payments treated?

Answer 4

An Adjustment to arrive at AGI.

Question 5

When should a cash basis taxpayer recognize income?

Answer 5

When cash is actually or constructively received, whether in property or cash.

Question 6

What is the educator expense limited to?

Answer 6

250

Question 7

What is the test for qualification in an IRA?

Answer 7

Rich and Participating Actively in a qualified plan.

Question 8

What is the limit on Student Loan Interest Adjustment to Arrive at AGI?

Answer 8

2.5K

Question 9

Which expenses are nondeductible as an adjustment to arrive at AGI?

Answer 9

Meals, Pre-move house hunting, Temporary Living Expenses, and Breaking a lease expenses.

Question 10

What is the formula for the Keogh Plan?

Answer 10

Net Business Income - 1/2 SE Tax - Keogh Deduction

Question 11

What treatment do you have if you’re over 65 and/or blind?

Answer 11

Extra Standard Deduction

Question 12

What are the Itemized Deductions?

Answer 12

Medical >10%
State, Local, and Foreign Taxes (Trade off with Sales Tax)
Interest Expenses (Home Equity + Acquisition indebtedness)
Charity
Casualty and Theft Losses (10% of AGI - 100)
Miscellaneous subject to 2%
Miscellaneous not subject (Estate Tax Paid/Gambling Losses)

Question 13

Which Tax Credits Are Refundable?

Answer 13

Child Tax Credit, 
EIC
Withholding Taxes
Excess Social Security
American Opportunity Credit (40% Refundable)

Question 14

What are the Individual Adjustments of AMTI that Increase/Decrease Tax?

Answer 14

P = Passive Activity Losses
A = Accelerated Depreciation
N = Net Operating Loss
I  = Installment Income
C = Contracts (% Depletion vs Completed Contract)

Question 15

What are the Individual Adjustments of AMTI that Increase Tax?

Answer 15

T = Tax Deductions
I = Interest Deductions
M = Medical Deductions (True up to 10% of AGI for > 65 7.5%)
M = Miscellaneous Deductions not Allowed
E = Exemptions (Personal and Standard Deduction)

Question 16

What are the Individual Tax Preference Items?

Answer 16

P = Private Activity Bond Interest
P = Percentage Depletion
P = Pre 1987 Accelerated Depreciation

Question 17

How is the AMT credit treated?

Answer 17

Offsets ordinary income, carried forward Forever.

Question 18

What Individual Tax Credits are permitted to reduce AMT?

Answer 18

F = Foreign Tax Credit
A = Adoption Credit
C = Child Tax Credit
C = Contributions to retirement plans
E = Earned Income Credit

Question 19

What is the statute of Limitations on Assessments for Individuals?

Answer 19

GR: 3 Years later of Filing or return due date.
Exception: >25% 6 years from due date or filing date

Question 20

What is the statute of limitations on refunds for individuals?

Answer 20

3 years from Filing or Due Date, 2 years from time tax was paid.

Question 21

When is an individual tax payer required to make Estimated Tax Payments?

Answer 21

1. > 1K Liability

2. Withholding is less than lesser of 90% CY, 100% PY, 110% PY if AGI > 150K