REG 4 Flashcards
What is the “wash sale” rule?
Taxpayers may not recognize losses attributable to the sale of stock or securities if substantially identical stock or securities are purchased 30 days before or after the sale giving rise to the loss. Gains from these sales can still be recognized.
Can a taxpayer recognize gain on property acquired from a related taxpayer when that acquired property is sold?
Yes, but only the realized gain above the amount of loss that was disallowed in the related taxpayer transaction (i.e. from father to daughter).
A taxpayer may deduct life insurance premiums when?
If the taxpayer is not the direct or indirect beneficiary.
How much employer-provided group-term life insurance is tax free?
The first $50,000.
How much medical expenses are deductible?
Those in excess of 10% of AGI.
What are charitable contribution deduction limits?
Up to 50% of AGI for contributions to qualified charitable organizations; up to 30% of AGI for stock contributions.
How much loss can be deducted from rental activities?
Assuming active participation and at least 10% ownership of the rental activity, up to $25,000. This deduction is reduced by 50% of AGI in excess of $100,000.
Are estates and trusts required to use the calendar year as the taxable period?
Estates: No; Trusts: Yes, unless tax exempt.
What is a grantor trust?
A trust where the taxpayer retains certain interests in the trust, and income from the trust is taxed to the taxpayer.
