REG 2 Flashcards
Taxability of corporate distributions to shareholders
Taxable to shareholder as dividend only to extent of earnings and profits, current and accumulated. Distributions in excess are treated as returns of capital.
Returns of capital to shareholders
Reduces’ shareholder’s adjusted basis
Tax treatement of sale of residence
Taxpayer may exclude realized gains up to $250,000 ($500,000 for filing joint) on the sale of residence if the residence has been owned and used by taxpayer for the last 2 out of 5 years as principal residence
Tax return preparer
If they are paid to prepare or retain employees to prepare a substantial portion of any federal tax return
Alternative Minimum Tax
Preferences include:
tax-exempt interest from private activity bonds
Fee simple estate
Gives the owner the right to sell, will, mortgage, and lien the property. It is the highest form of land ownership
Securities Act of 1933 Exemptions from registration
Exemptions:
bonds issued by:
governments, charities, banks, savings and loans, and farmers’ co-operatives
Dividends Received Deduction
C corporations owns less than 20% - 70% of dividends received or accrued from corporation may be deducted.
owning more than 20% but less than 80% - 80%
owning more than 80% - 100% deducted
Deduction is limited to percentage of the taxable income of the corporation
Qualified Moving expenses
Costs for:
moving household goods and lodging during move
Section 1231 Loss
Real or depreciable business property held over a year
Subject to the 2% of AGI floor
Unreimbursed job expenses, tax return preparation fees and other miscellaneous deductions
Grantor trust
when the individual creating a trust retains certain interests in the trust
Qualified endorsement
One that limits the warranties that the transferor of the instrument gives. “without recourse”
Rule 504
Company’s total offerings for a year are under $1 million, the company is not an investment company. There is no limit on the overall number of investors
