Reg 5 Flashcards
are property insurance premiums and/or casualty insurance premiums deductible
No - unless part of a business property
When is a cash award excluded from gross income
excluded is no services were required
If selection was made without any action by the recipient
The proceeds are assigned to a government unit or charity
Can you deduct penalties for cashing in a CD before the maturity date
Yes - deductible in the period incurred
Can you deduct higher education classes to help you maintain a license or keep up with technology
Yes - not for a new career, but to maintain a career so CPE but not CPA review course
Is employer provided medical insurance coverage included un a taxpayer’s gross income
No
Davis, a sole proprietor with no employees, has a Keogh profit-sharing plan to which he may contribute 15% of his annual earned income. For this purpose, “earned income” is defined as net self-employment earnings reduced by the
Deductible Keogh contribution and one-half of the self-employment tax.
What is the process of offsetting capital losses
You can use sST losses to offset LT gains
You do this at the highest rates first
so 70K loss is offset by a collectible gain (28%) first then STGain (25%) then lastly the LT Gain (15%)
What is the amount that is excluded from gross income for an award from an employer of service or achieving safety objectives
$400
What if you are awarded a bonus in dec, but done receive it until January
Not taxed on it until received - so january
What are the rules on self employment tax
A portion of the self-employment tax is equivalent to the Social Security tax paid equally by the employee and the employer on the employee’s income, limited to a certain amount.
The remainder represents payments for Medicare and are applied to all income without limitation.
The amount of self-employment income that is therefore subject to the self-employment tax that is equivalent to Social Security is the amount of the limit reduced by any wages upon which the taxpayer has paid the Social Security tax through an employer.
Are punative damages awarded taxable
They are fully taxable
If you get these from a settlement for a event that involves blood - what are included in taxable income and which aren’t
punative damages
workers compensation
reimbursed medical expenses
compensation for emotional expenses
Yes - punative damages (fully taxable)
NO - workers compensation
NO - reimbursed medical expenses ( taxed on the amount you have already claimed a deduction for)
YES/NO compensation for emotional expenses ( if you are given the award because of a bodily injury event then excluded. Generally not though - and can only exclude up to the amount that you paid for medical care for the emotional distress)
What are the limitation so f deducting student loan interest
You can deduct up to 2500 per year of student loan interest forever, but it is phased out for a single (75K) or 125K - Joint
What is form 1139 for
used by a corporation for a refund of taxes from prior years - due to NOL carry back or net capital loss
What is form 1045
used by a taxpayer for refund for carry back of current years net operating loss or net capital loss
