Reg - 1

Question 1

When is Alimony taxable?

Answer 1

Received prior to 12/31/18. Must be cash or cash equivalent. Child support and Property settlements are NOT taxable! Can also be used as a deduction for AGI

Question 2

When can one use PAL?

Answer 2

Only against a PAG, unless one disposed of the business in the current year

Question 3

For Bonds to be non-taxable:

Answer 3

Buyer of bonds must be sole owner of bonds, owner must be over 24, must be used for education, etc

Question 4

Prepaid Rent is:

Answer 4

Rental Income for this year, even for accrual basis

Question 5

Qualifying child?

Answer 5

Under 24 - if student doesnt bring in more than 50% of support, primary home is at home

Question 6

Schedule K and Form 1065:

Answer 6

Both can be used as deductions

Question 7

When is interest taxable?

Answer 7

All, except state stuff and gov’t bonds

Question 8

Taxable income:

Answer 8

Is based on FV received, Unemployment is included

Question 9

At risk:

Answer 9

Any losses in excess of the at-risk amount are suspended and carried forward without expiration and are deductible against income in future years from that activity

Question 10

Are distributions taxable?

Answer 10

No - as long as Basis in company exceeds distribution

Question 11

Uniform Capitalization Rules:

Answer 11

1) Real or Tangible Property
2) 27 Million Gross receipts
3) Research is excluded

Question 12

For annuities:

Answer 12

Take the payments, subtract the investment

Question 13

For C Corps:

Answer 13

Distributions are Taxable Income

Question 14

For S Corps:

Answer 14

Distributions are Not Taxable Income

Question 15

Treasure Troves:

Answer 15

Are included in tax - if cash

Question 16

Inheritance:

Answer 16

Not Taxable

Question 17

Mom and Pop Rule:

Answer 17

To rental property where you actively participate, and make less than 100k, Up to 25k may be used even against active income. Phase out is 100k-150k, so if income is 130k, take half of the 30k, and subtract that from the allowable 25k, which leaves 10k

Question 18

When can a loss net out against a gain?

Answer 18

When both are passive, but the loss can be carried forward

Question 19

What is passive income?

Answer 19

Rental income, but portfolio income is different

Question 20

What are the carry forward rules for various incomes?

Answer 20

Passive Losses - only forward.
Capital Losses - 3,000 can be used each year vs portfolio losses
C Corp Capital Losses - Carry back 3 years and forward 5 years

Question 21

When is a single taxpayer not eligible for QBI?

Answer 21

At 220,050 or more

Question 22

Levels of Participation:

Answer 22

Active Participation then Materially Participates

Question 23

For SSTB over the allowable income:

Answer 23

No QBI is allowed

Question 24

Dividend, short/long tcg:

Answer 24

Is not passive income, rather portfolio income

Question 25

Employer contribution and plan earnings are not taxable until:

Answer 25

Actually Distributed

Question 26

If a rental is less than 15 days during year, then:

Answer 26

The income is not taxable

Question 27

If a person lives in a rental more than 14 days during year:

Answer 27

No net loss is allowed

Question 28

Employee fringe benefit:

Answer 28

Is always taxable to employee

Question 29

Surviving Spouse:

Answer 29

Can go for 2 years but needs dependent child

Question 30

QBI - whats the calculation?

Answer 30

20% of QBI, but if you make btwn 170-220, then take 50% of W2 Wages, take the 20 % of QBI - the 50% of W2 =x , then calculate amount over the 170,050, divide it by 50,000, take that and multiply by x, then take the 20% of QBI and subtract that number

Question 31

QTB ad SSTB:

Answer 31

Are treated the same if theyre below the threshold

Question 32

QBI:

Answer 32

Below the line. The overall deduction is limited to the lesser of combined QBI or 20 percent of the taxpayer’s taxable income in excess of net capital gain.

Question 33

Life Insurance Policy - taxable or not?

Answer 33

Only interest

Question 34

Bad Debt Expense:

Answer 34

Can only be used for accrual

Question 35

Personal Health Insurance:

Answer 35

Above the line, not deduction

Question 36

State Income Tax:

Answer 36

Deduction, not Schedule C

Question 37

Max for Capital Loss of stocks:

Answer 37

3k

Question 38

Guaranteed payments to partners are:

Answer 38

Deductible on Form 1065 to arrive at partnership ordinary income. On Schedule K-1, guaranteed payments are shown as income and flow through as ordinary income.

Question 39

Qualifying child:

Answer 39

19, or 24 if student

Question 40

Qualifying Relative:

Answer 40

Earns less than 4,300

Question 41

MFJ:

Answer 41

If married at end of year, or if spouse dies during year

Question 42

For SS:

Answer 42

85% is the max amount

Question 43

The interest exclusion is:

Answer 43

Reduced by qualified scholarships that are exempt from tax and other nontaxable payments received for educational expenses (other than gifts and inheritances).

Question 44

Gain of stock is recognized on:

Answer 44

Trade Date

Question 45

IRAs:

Answer 45

Are taxed as ordinary income. If withdrawn before 59.5, then also gets a 10% penalty tax. Up to 6,000 of contributions are deductions, subject to some complicated rules

Question 46

Jury Duty is:

Answer 46

Included in AGI. When employer is reimbursed, it can be used as a deduction for AGI

Question 47

SE Tax:

Answer 47

One half is deducted to arrive at AGI, but is not an itemized deduction

Question 48

PSC’s and Farming:

Answer 48

Can use Cash Method for Tax

Question 49

ESPP:

Answer 49

David Tyree

Question 50

Qualifying Surviving Spouse

Answer 50

Spouse died in prior 2 years and no re-marry and could’ve filed a joint return, child lived in taxpayer home for whole year, you cover more than half the cost of child for year

Question 51

State Income Tax 1

Answer 51

If you don’t itemize the deduction in Year 1, then the refund is not taxable in Year 2

Question 52

State Income Tax 2

Answer 52

Interest is always taxable - except bonds

Question 53

Are Awards taxable?

Answer 53

Yes - unless no action on your part and teh prize is awarded to a gov’t or charitable entity