R3 what it do babyyy Flashcards
In general how is the donee’s basis of a gift determined? How is the holding period determined?
The donee’s basis of a gift is the same as the donors basis, the carryover basis may be increased for the gift tax paid on the appreciation of the gift.
holding period includes the donors holding period, unless the basis becomes FMV then the holding period starts all over again.
what is the basis of a gift when you are figuring out gain or loss in a sale transaction? this is if the basis is higher than FMV
if a gain: the basis is the donors basis rolled over
If a loss: basis is the FMV at the date given
If sales price is between the donor’s rollover basis and the FMV, there is no gain or loss to be recognized
When talking about a gift, what basis do you use for depreciation?
you know, its actually the lesser of the donors adjusted basis or the FMV at the date of gifting…..
Fun fact, this is a seperate basis from the gift/loss basis
How do you handle the basis of inherited property? What about the holding period…like short or long term???
Its actually the LOWER of either the: FMV at the date of death ORRRRR the FMV at alertnate lower valuation date (if disposed of less than 6 months from the date of death)…its is ALWAYS considered long term property no matter what.
When is a gain NOT taxed????
Think: HIDE IT
“Gains are not taxed when you can HIDE IT”
Homeowners Exclusion
Involuntary Exclusion
Divorce property settlement
Exchange of like kind business shit (real prop only)
Installment Sale
Treasury and capital stock transactions (by corps)
Can you talk me through the thing we call involuntary exclusion and why gains arent taxed?
What happens if you dont restore fully? can you pocket the cash?
This is if your property is like damaged or stolen, so you get restored up to where you were and you wont be taxed…BUT only if you restore within 2 years for personal or 3 years for business…holding period includes time the OG property was held
BUT if you dont restore fully, or have some extra cash as a result… that is taxed my dude.
OOOO Brad, can you tell me about why homeowners sales are excludeable gains??
yeah so basically if you have lived in the house for 2 out of 5 years you can not be taxed on the gain up to 250,000 for S or 500,000 MFJ
What makes something a like kind exchange??? What is the basis for it??
Tangible real property, used in a trade or business, or held for investment
FMV - Deferred Gain + Deferred Loss
So we know to hide them gains….but what about the nondeductible losses???
We gotta WRaP them jaunts right?
Wash Sale Loss
Related Party Transactions
AND
Personal losses
Wtf is a wash sale can you talk about what the tax treatment is
losses are disallowed/nondeductible if the same security is bought with 30 days bbefore or after the sale…the disallowed loss increases the basis and gains are taxable
How much can you deduct per year for capital gains or losses??
3,000 on them losses baby and the rest can be carried forward to offset shit
Capital gains are fully taxable tho :/
What are 1231 assets? how do you get gains and losses and shit
usually depreciable or real property used in trade or business held for more than 12 months.
Net all section 1231 gains and losses
If gains > llosses, then its a LTCG
if losses > Gains its an ordinary loss
How do you handle 1245 assets
recapture all depreciation as ordinary income
any excess gain is a 1231 gain
So you have a related party transaction…what do you do for the tax treatment
No deduction is allowed for losses on sales to related parties…
but if the thing is later sold again to an unrelated party…the gain recognized can be offset, not below zero, by the previously disallowed loss.
When does the mid-quarter convention apply? what about the half year convention?
mi quarter come sin if 40% of more of a property is placed in service during the last three months of tax year.
Half year states that 6 months of depreciation is taken in the year of acquisition and the year of disposal.
