REG 3 Flashcards
No gain or loss is recognized if property is transferred to a corporation solely in exchange for stock if the transferors of property, in the aggregate, own at least 80% of the stock of the corporation after the exchange.
No gain or loss is recognized if property is transferred to a corporation solely in exchange for stock if the transferors of property, in the aggregate, own at least 80% of the stock of the corporation after the exchange.
For head of household filing status, the following costs are considered in determining whether the taxpayer has contributed more than one-half the cost of maintaining the household: rent; mortgage interest; taxes; insurance on the home; repairs; utilities; and food eaten in the home.
For head of household filing status, the following costs are considered in determining whether the taxpayer has contributed more than one-half the cost of maintaining the household: rent; mortgage interest; taxes; insurance on the home; repairs; utilities; and food eaten in the home.
Sec. 179 permits a taxpayer to elect to treat up to $1,020,000 (for 2019) of the cost of qualifying depreciable personal property as an expense rather than as a capital expenditure. However, the $1,020,000 maximum is reduced dollar for dollar by the cost of qualifying property placed in service during the taxable year that exceeds $2,550,000.
Sec. 179 permits a taxpayer to elect to treat up to $1,020,000 (for 2019) of the cost of qualifying depreciable personal property as an expense rather than as a capital expenditure. However, the $1,020,000 maximum is reduced dollar for dollar by the cost of qualifying property placed in service during the taxable year that exceeds $2,550,000.
Medical expenses for individuals are deductible, less a 10% AGI. Ex - $4K in medical expenses and AGI of $30K. $4K minus $3K (which is 10% of AGI) = $1K medical expense deduction
Medical expenses for individuals are deductible, less a 10% AGI. Ex - $4K in medical expenses and AGI of $30K. $4K minus $3K (which is 10% of AGI) = $1K medical expense deduction
Dividends received by a corporation from another corporation are 50% excluded from income for less than 20% owned domestic corporations and 65% excluded from income for more than 20% owned domestic corporations. If 80% or more of the corporation is owned, 100% of the dividend is excluded from income
Note - the dividend received deduction is limited to a percentage of the taxable income of the corporation, unless the corporation sustains a net operating loss.
Dividends received by a corporation from another corporation are 50% excluded from income for less than 20% owned domestic corporations and 65% excluded from income for more than 20% owned domestic corporations. If 80% or more of the corporation is owned, 100% of the dividend is excluded from income
Note - the dividend received deduction is limited to a percentage of the taxable income of the corporation, unless the corporation sustains a net operating loss.
For tenants by the entirety and for joint tenants with rights of survivorship created between spouses, 50% of the value of the jointly-owned interest is included in the estate of the decedent spouse. Therefore, the gross estate of the first spouse to die includes 50% of the value of all property owned by the couple, regardless of which spouse furnished the original consideration.
For tenants by the entirety and for joint tenants with rights of survivorship created between spouses, 50% of the value of the jointly-owned interest is included in the estate of the decedent spouse. Therefore, the gross estate of the first spouse to die includes 50% of the value of all property owned by the couple, regardless of which spouse furnished the original consideration.
A financing statement need not be filed to create an enforceable security interest. Filing a financing statement perfects the interest, but it is not necessary to create the interest.
A financing statement need not be filed to create an enforceable security interest. Filing a financing statement perfects the interest, but it is not necessary to create the interest.
IRA contributions, trade or business expenses, and a net capital loss are deductible in arriving at AGI.
IRA contributions, trade or business expenses, and a net capital loss are deductible in arriving at AGI.
The Statute of Frauds requires a suretyship contract to be in writing unless the surety financially or economically benefits from making the surety agreement.
The Statute of Frauds requires a suretyship contract to be in writing unless the surety financially or economically benefits from making the surety agreement.
The midquarter convention applies if more than 40% of the value of the personalty purchased during the year is placed in service in the last quarter of the year. Total purchase amount for personalty for the year is $133,500 (furniture, Hightech equipment, truck, and computer). Total purchase amount in the fourth quarter is $55,000.
$55,000 / $133,500 = 41.2%, so the midquarter convention is required. Under the midquarter convention, assets are grouped by the quarter in which they were acquired. The correct calculation is as follows using the MACRS Midquarter Table:
Furniture $32,000 × 25% = $ 8,000
HighTech Equip. $45,000 × 15% = $ 6,750
Truck $55,000 × 5% = $ 2,750
Total $17,500
The midquarter convention applies if more than 40% of the value of the personalty purchased during the year is placed in service in the last quarter of the year. Total purchase amount for personalty for the year is $133,500 (furniture, Hightech equipment, truck, and computer). Total purchase amount in the fourth quarter is $55,000.
$55,000 / $133,500 = 41.2%, so the midquarter convention is required. Under the midquarter convention, assets are grouped by the quarter in which they were acquired. The correct calculation is as follows using the MACRS Midquarter Table:
Furniture $32,000 × 25% = $ 8,000
HighTech Equip. $45,000 × 15% = $ 6,750
Truck $55,000 × 5% = $ 2,750
Total $17,500
When using the MACRS tables, the percentage in the table is always multiplied by the asset’s original cost.
When using the MACRS tables, the percentage in the table is always multiplied by the asset’s original cost.
Recovery for personalty is computed as though assets are purchased at midyear (midyear convention), while recovery for realty uses a mid-month convention. For personalty, depreciation is allowed for half of the year in which it is purchased, regardless of when it is purchased. For realty, depreciation is allowed for half of the month in which it is purchased, regardless of the date it is purchased during the month.
In the year of purchase, these conventions are already incorporated into the percentages provided in the MACRS tables so no adjustment is necessary to the numbers from the tables.
Recovery for personalty is computed as though assets are purchased at midyear (midyear convention), while recovery for realty uses a mid-month convention. For personalty, depreciation is allowed for half of the year in which it is purchased, regardless of when it is purchased. For realty, depreciation is allowed for half of the month in which it is purchased, regardless of the date it is purchased during the month.
In the year of purchase, these conventions are already incorporated into the percentages provided in the MACRS tables so no adjustment is necessary to the numbers from the tables.
A self-employed taxpayer is allowed a deemed deduction equal to 7.65% of self-employment earnings in computing the amount of net earnings upon which the tax is based. The purpose of this deemed deduction is to reflect the fact that employees do not pay FICA tax on the corresponding 7.65% FICA tax paid by their employers.
A self-employed taxpayer is allowed a deemed deduction equal to 7.65% of self-employment earnings in computing the amount of net earnings upon which the tax is based. The purpose of this deemed deduction is to reflect the fact that employees do not pay FICA tax on the corresponding 7.65% FICA tax paid by their employers.
Sec. 179 permits a taxpayer to treat up to $1,020,000 of the cost of qualifying depreciable personal property as an expense rather than as a capital expenditure. However, the $1,020,000 maximum is reduced dollar for dollar by the cost of qualifying property placed in service during the taxable year that exceeds $2,550,000 ($2.55M)
Sec. 179 permits a taxpayer to treat up to $1,020,000 of the cost of qualifying depreciable personal property as an expense rather than as a capital expenditure. However, the $1,020,000 maximum is reduced dollar for dollar by the cost of qualifying property placed in service during the taxable year that exceeds $2,550,000 ($2.55M)
According to Treasury Department Circular 230, a practitioner may charge a contingent fee for representing a client in connection with a judicial proceeding.
According to Treasury Department Circular 230, a practitioner may charge a contingent fee for representing a client in connection with a judicial proceeding.
