REG - 6/13 Part I Flashcards
What is the latest date that an IRA contribution can be made in order to qualify as a deduction on the prior year’s return?
Contributions can be made to a traditional IRA for a year at any time during the year, and must be made no later than the due date for filing the return for that year, not including extensions.
What is the credit individuals can take for adoption expenses?
The credit for adoption expenses is a nonrefundable credit of up to $13,840 (for 2018) for qualified adoption expenses incurred for each eligible child. The Taylors’ qualified adoption expenses will be taken into account in the year the adoption becomes final and include all reasonable and necessary adoption fees, court costs, attorney fees, and other expenses that are directly related to the legal adoption by the taxpayer of an eligible child.
When is a qualified appraisal required for donated real property items? (individuals)
A qualified appraisal is required if the donated value exceeds $5,000.
What is the charitable contribution deduction for long-term appreciated stock? (individuals)
The deduction for capital gain property is generally FMV subject to a 30% of AGI limitation.
When is a contemporaneous written acknowledgement is required for donations? (individuals)
Contributions of $250 or more require a contemporaneous written acknowledgement.
Does Lost-Income Policy qualify as deductible medical expenses for individuals to itemize?
The lost-income policy does not qualify as medical insurance.
What are the requirements of the Child Tax Credit?
Individual taxpayers are permitted to take a tax credit based solely on the number of their dependent children under age 17.
A qualifying child must be a U.S. citizen or resident.
The amount of the credit is $2,000 per qualifying child, but is subject to reduction if adjusted gross income exceeds certain income levels.
What is a Homestead Exemption?
A homestead exemption is a legal provision that helps shield a home from some creditors following the death of a homeowner spouse or the declaration of bankruptcy. It can also provide surviving spouses with ongoing property-tax relief.
*Although a homestead exemption can exempt a debtor’s equity in certain property from postjudgment collection by a creditor, the exemption applies to general creditors and the bankruptcy trustee, not secured creditors or lien holders.
What type of retirement plan can a self-employed individual contribute to?
A self-employed individual may contribute to a qualified retirement plan called a Keogh plan.
The maximum contribution to a Keogh profit-sharing plan is the lesser of $55,000 (for 2018) or 25% of earned income. For this purpose, “earned income” is defined as net earnings from self-employment (i.e., business gross income minus allowable business deductions) reduced by the deduction for one-half of the self-employment tax, and the deductible Keogh contribution itself.
What is a Compulsory Disposition of Collateral?
Acceptance of the collateral as discharge of obligation.
*The secured party normally has the right to retain (or sell) the collateral to satisfy the obligation. However, the secured party cannot retain the collateral if it is consumer goods and the debtor has paid 60% or more of the obligation. In such a case, the debtor is entitled to a compulsory disposition of the goods. Control’s security interest is in equipment, not consumer goods, and Arrow has paid only 50% of the obligation. Thus, Arrow is not entitled to a compulsory disposition.
