R2 Flashcards
Which costs are required to be capitalized?
DM, DL, OH
Which retailers do capitalized costs apply to?
10 MM
How are suspended passive activity losses treated?
Suspended passive losses are carried forward, but not back, until utilized
How are jury duty payments treated?
An Adjustment to arrive at AGI.
When should a cash basis taxpayer recognize income?
When cash is actually or constructively received, whether in property or cash.
What is the educator expense limited to?
250
What is the test for qualification in an IRA?
Rich and Participating Actively in a qualified plan.
What is the limit on Student Loan Interest Adjustment to Arrive at AGI?
2.5K
Which expenses are nondeductible as an adjustment to arrive at AGI?
Meals, Pre-move house hunting, Temporary Living Expenses, and Breaking a lease expenses.
What is the formula for the Keogh Plan?
Net Business Income - 1/2 SE Tax - Keogh Deduction
What treatment do you have if you’re over 65 and/or blind?
Extra Standard Deduction
What are the Itemized Deductions?
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)
Which Tax Credits Are Refundable?
Child Tax Credit, EIC Withholding Taxes Excess Social Security American Opportunity Credit (40% Refundable)
What are the Individual Adjustments of AMTI that Increase/Decrease Tax?
P = Passive Activity Losses A = Accelerated Depreciation N = Net Operating Loss I = Installment Income C = Contracts (% Depletion vs Completed Contract)
What are the Individual Adjustments of AMTI that Increase Tax?
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)
What are the Individual Tax Preference Items?
P = Private Activity Bond Interest P = Percentage Depletion P = Pre 1987 Accelerated Depreciation
How is the AMT credit treated?
Offsets ordinary income, carried forward Forever.
What Individual Tax Credits are permitted to reduce AMT?
F = Foreign Tax Credit A = Adoption Credit C = Child Tax Credit C = Contributions to retirement plans E = Earned Income Credit
What is the statute of Limitations on Assessments for Individuals?
GR: 3 Years later of Filing or return due date.
Exception: >25% 6 years from due date or filing date
What is the statute of limitations on refunds for individuals?
3 years from Filing or Due Date, 2 years from time tax was paid.
When is an individual tax payer required to make Estimated Tax Payments?
- > 1K Liability
2. Withholding is less than lesser of 90% CY, 100% PY, 110% PY if AGI > 150K
