REG 4 Flashcards
Beginning in 2018, cash charitable contributions can be deducted up to 60% of AGI
Beginning in 2018, cash charitable contributions can be deducted up to 60% of AGI
Excess business losses are not deductible in the current year and are carried over and treated as part of the taxpayer’s NOL carryforward in future years. The amount deductible in the carryforward years is limited to 80% of taxable income before such deduction ($500,000 × 80% = $400,000)
Excess business losses are not deductible in the current year and are carried over and treated as part of the taxpayer’s NOL carryforward in future years. The amount deductible in the carryforward years is limited to 80% of taxable income before such deduction ($500,000 × 80% = $400,000)
Deductions for cash-basis taxpayers generally are taken when actually paid. However, for expenses covering 12 months or more, the deduction must be spread over the period for which the expenses apply. Thus, since the loan was to be repaid in 12 months, the deduction for the interest must be spread over the 12-month period.
Deductions for cash-basis taxpayers generally are taken when actually paid. However, for expenses covering 12 months or more, the deduction must be spread over the period for which the expenses apply. Thus, since the loan was to be repaid in 12 months, the deduction for the interest must be spread over the 12-month period.
Legal separation is the same as being divorced for tax purposes, so filing status is single. Filing status is determined on the last day of the tax year.
Legal separation is the same as being divorced for tax purposes, so filing status is single. Filing status is determined on the last day of the tax year.
A corporation may deduct up to $5,000 of organizational expenditures for the tax year in which the corporation begins business. The $5,000 amount must be reduced by the amount by which organizational expenditures exceed $50,000. Remaining expenditures are deducted ratably over the 180-month period beginning with the month in which the corporation begins business.
A corporation may deduct up to $5,000 of organizational expenditures for the tax year in which the corporation begins business. The $5,000 amount must be reduced by the amount by which organizational expenditures exceed $50,000. Remaining expenditures are deducted ratably over the 180-month period beginning with the month in which the corporation begins business.
No loss can be recognized on nonliquidating corporate distributions to shareholders. A gain will be recognized though if the property that is distributed appreciated in value
No loss can be recognized on nonliquidating corporate distributions to shareholders. A gain will be recognized though if the property that is distributed appreciated in value
When accumulated E&P is negative and current E&P is positive, distributions are treated as dividends to the extent of current E&P. Thus, on a $15K distribution, $10,000 is reported as dividend income and the other $5,000 is a return of capital.
When accumulated E&P is negative and current E&P is positive, distributions are treated as dividends to the extent of current E&P. Thus, on a $15K distribution, $10,000 is reported as dividend income and the other $5,000 is a return of capital.
The minimum accumulated earnings credit is $250,000 for nonservice corporations; $150,000 for service corporations.
The minimum accumulated earnings credit is $250,000 for nonservice corporations; $150,000 for service corporations.
The generation-skipping transfer tax is imposed as a separate tax in addition to the federal gift and estate taxes, and is designed to prevent an individual from escaping an entire generation of gift and estate taxes by transferring property to a person that is two or more generations below that of the transferor. The tax is imposed at the highest tax rate (40%) under the transfer tax rate schedule.
The generation-skipping transfer tax is imposed as a separate tax in addition to the federal gift and estate taxes, and is designed to prevent an individual from escaping an entire generation of gift and estate taxes by transferring property to a person that is two or more generations below that of the transferor. The tax is imposed at the highest tax rate (40%) under the transfer tax rate schedule.
Alimony must be received in cash
Alimony must be received in cash
Cash payments must be required to terminate upon the death of the payee spouse to be treated as alimony
Cash payments must be required to terminate upon the death of the payee spouse to be treated as alimony
Corporate reorganizations are generally nontaxable under the theory that they represent a mere change in form since there is an underlying continuity of shareholder interests and a continuity of the business enterprise.
Corporate reorganizations are generally nontaxable under the theory that they represent a mere change in form since there is an underlying continuity of shareholder interests and a continuity of the business enterprise.
State tax refunds received, do not reduce itemized deductions; rather they are most likely included in income
State tax refunds received, do not reduce itemized deductions; rather they are most likely included in income
Generally, losses from passive activities can only be used to offset income from passive activities. If there is insufficient passive activity income to absorb passive activity losses, the unused losses are carried forward indefinitely or until the property is disposed of in a taxable transaction.
Generally, losses from passive activities can only be used to offset income from passive activities. If there is insufficient passive activity income to absorb passive activity losses, the unused losses are carried forward indefinitely or until the property is disposed of in a taxable transaction.
Beginning in 2018, an NOL may not be carried back and may be carried forward indefinitely
Beginning in 2018, an NOL may not be carried back and may be carried forward indefinitely
