REG 2 Flashcards

1
Q

What is the basic deduction calculation for the QBI deduction?

A

20% x QBI

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2
Q

The term active participation for passive activity loss is relevant in relation to:

A

Rental real estate activities

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3
Q

How much capital loss deduction is a corporate taxpayer entitled to use to offset against ordinary income in a given year?

A

$0. a corporation can’t use capital losses to offset ordinary income. they can, however, carry the loss back 3 years and forward 5 years to offset net capital gains.

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4
Q

What is the calculation for a taxpayer’s basis in new real property received in a like-kind transaction?

A

FMV of new property
Less: deferred gain
Plus: deferred loss

Deferred gain = gain realized - gain recognized

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5
Q

What is the calculation for the Child and Dependent Care Credit a taxpayer can claim?

A

Only children under 13 qualify

20% (married filed joint)
Times: lowest paid spouse income

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6
Q

What is the calculation for a SEP IRA deduction for a self-employed taxpayer?

A

Net income
Less: Self-employment tax x 50%
Times: 20%

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7
Q

Net rental income from rental property calculation:

A

Must rent property for 15 days during the year.
Rental income
less: prorated mortgage interest and taxes
Less: Advertising

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8
Q

What is the tax liability associated with the early withdrawal of a traditional IRA?

A

Amount withdrew
Times: The marginal tax rate
Plus: amount withdrew x 10% penalty tax

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9
Q

Section 1245 (ordinary income) vs Section 1231

A

-1245 required the lessor of the depreciation taken or the gain-recognized recaptured. Total depreciation will be recaptured as ordinary income and the remaining depreciation will be section 1231.
- 1231 are assets used in a business and held for over 12 months

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10
Q

Section 291 Depreciation Recapture rules

A

property must be sold at a gain and the taxayer is a C-Corp.
-the gain is ordinary income to the extent of 20% of the lesser of 1) prior depreciation taken or 2) the gain

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11
Q

Child tax credit calculation? (different from child or dependent care credit)

A

Taxpayers may claim a $2,000 credit for each child under 17 subject to a phase-out limit.

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12
Q

What is a corporation basis in property received in exchange for stock?

A

The basis is the same basis as the taxpayer’s basis immediately prior to it’s contribution.

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13
Q

What amount of gain would be recaptured under Section 1245?

A

The lessor of
1) depreciation taken
or 2) gain recognized to be recaptured

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