Random Flashcards
Capital Assets
Investment assets and personal use assets - ie: stocks, bonds, real estate, and goodwill
Assets other than inventory, accounts receivable, notes receivable, assets used in a trade or business owned for more than 1 year, or creative works (in the hands of the creator), or certain misc assets (such as gov publications or obligations). Self created musical works are treated as capital assets even though these are creative works
Collectible
Tangible personal property like coins, art, and antiques purchased for investment purposes. Gold and silver are also classified as collectibles subject to the 28% rate
Normal LTCG rate
15%
Rate on net capital gain on real estate/straight line depreciation
25%
Rate on collectables
28%
Form 8929
Gains or losses on sale of capital assets (ST & LT)
Schedule D
Where capital G/L summaries from 8949 are carried to
Form 4562
Depreciation and Amortization
Section 179 election
election to expense a limited amount of tangible personalty if used in a trade activity (cannot be for investment)
MACRS 7 yrs property
office furniture and fixtures
MACRS 5 yrs property
automobiles, trucks, computers, equip
Section 1250 Recapture vs Section 1245 Recapture
1250: Recaptures realty (land and assets permanently attached to land)
1245: Recaptures gains on personality as OI to the extent of AD (assets other than realty)
Section 1231 Assets
Assets that are used in trade or business and have been owned for more than a year
List the qualifying property for like-kind exchanges.
Business or investment property;
Not inventory or receivables;
Must be “like-kind;”
Cannot be across US borders;
Special rules when related taxpayers.
In these exchanges losses are never recognized and recog gain is the lesser of the realized gain or boot
Form 1040
Interest (lines 1-4) and dividends (lines 5-6)
Gross Income
Amount of realized income after eliminating deferred and excluded income
Form 8606
Conversions of 401k plans into Roth plans