REG 6 Flashcards
Section 179 permits a taxpayer to elect to deduct up to $1,020,000 (2019) of the acquisition cost of tangible personal property used in a trade or business.
Section 179 permits a taxpayer to elect to deduct up to $1,020,000 (2019) of the acquisition cost of tangible personal property used in a trade or business.
The proceeds of life insurance on the decedent’s life are always included in the decedent’s gross estate if:
(1) they are receivable by the estate, (2) the decedent possessed any incident of ownership in the policy, or (3) they are receivable by another (e.g., the estate’s executor) for the benefit of the estate.
The proceeds of life insurance on the decedent’s life are always included in the decedent’s gross estate if (1) they are receivable by the estate, (2) the decedent possessed any incident of ownership in the policy, or (3) they are receivable by another (e.g., the estate’s executor) for the benefit of the estate.
NEGLIGENCE on the part of a CPA arises from the failure to comply with the standards of due care while conducting an audit. This is distinguished from GROSS NEGLIGENCE which is a reckless departure from the standards of due care. A CPA is generally not liable to foreseeable third parties for ordinary negligence.
NEGLIGENCE on the part of a CPA arises from the failure to comply with the standards of due care while conducting an audit. This is distinguished from GROSS NEGLIGENCE which is a reckless departure from the standards of due care. A CPA is generally not liable to foreseeable third parties for ordinary negligence.
When calculating the accumulated earnings tax, corporations are given a credit, the accumulated earnings credit, of $250,000 ($150,000 for certain service corporations) plus dividends paid within the first 3 1/2 months of the corporation’s tax year less accumulated earnings and profits at the end of the preceding tax year.
The accumulated earnings tax is equivalent to 20% of the corporation’s accumulated taxable income.
When calculating the accumulated earnings tax, corporations are given a credit, the accumulated earnings credit, of $250,000 ($150,000 for certain service corporations) plus dividends paid within the first 3 1/2 months of the corporation’s tax year less accumulated earnings and profits at the end of the preceding tax year.
The accumulated earnings tax is equivalent to 20% of the corporation’s accumulated taxable income.
There are limits to how much a corporation can donate to charity. The donation cannot be more than 10 percent of the company’s annual taxable income.
Excess charitable contributions can be carried over a maximum of five years.
There are limits to how much a corporation can donate to charity. The donation cannot be more than 10 percent of the company’s annual taxable income.
Excess charitable contributions can be carried over a maximum of five years.
Worthless securities generally receive capital loss treatment. However, if the loss is incurred by a corporation on its investment in an affiliated corporation (80% or more ownership), the loss is generally treated as an ordinary loss.
Worthless securities generally receive capital loss treatment. However, if the loss is incurred by a corporation on its investment in an affiliated corporation (80% or more ownership), the loss is generally treated as an ordinary loss.
Under wash-sale rules, 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. Wash-sale rules do not prevent the recognition of gains from these sales.
Under wash-sale rules, 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. Wash-sale rules do not prevent the recognition of gains from these sales.
Lottery winnings are gambling winnings and must be included in gross income. Gambling losses are deductible from AGI as a miscellaneous deduction (to the extent of winnings) if a taxpayer itemizes deduction.
Lottery winnings are gambling winnings and must be included in gross income. Gambling losses are deductible from AGI as a miscellaneous deduction (to the extent of winnings) if a taxpayer itemizes deduction.
a qualified personal casualty loss is deductible in the computation of an individual’s AMT.
a qualified personal casualty loss is deductible in the computation of an individual’s AMT.
Corporate distributions to shareholders are taxed to shareholders as dividend income to the extent that the distribution does not exceed current and accumulated earnings and profits. Distributions in excess of current and accumulated earnings and profits are treated as returns of capital. The distribution of appreciated property increases a corporation’s earnings and profits increase by the amount of the difference between the distributed property’s fair market value and the corporation’s adjusted basis in the distributed property.
Thus, while Dahl Corp. had earnings and profits totaling $9,000 before the dividend declaration and distribution, the corporation’s earnings and profits increased by $35,000, the land’s $40,000 fair market value less its adjusted basis of $5,000, to $44,000 due to the distribution of the land.
Corporate distributions to shareholders are taxed to shareholders as dividend income to the extent that the distribution does not exceed current and accumulated earnings and profits. Distributions in excess of current and accumulated earnings and profits are treated as returns of capital. The distribution of appreciated property increases a corporation’s earnings and profits increase by the amount of the difference between the distributed property’s fair market value and the corporation’s adjusted basis in the distributed property.
Thus, while Dahl Corp. had earnings and profits totaling $9,000 before the dividend declaration and distribution, the corporation’s earnings and profits increased by $35,000, the land’s $40,000 fair market value less its adjusted basis of $5,000, to $44,000 due to the distribution of the land.
Lean, McCoy, and Norsome all purchased the furniture in the ordinary course of business. As such, all three parties take free of the security interest even if it was perfected. This is true whether they purchased the furniture for consumer or business use and whether they knew of the security agreement or not.
Lean, McCoy, and Norsome all purchased the furniture in the ordinary course of business. As such, all three parties take free of the security interest even if it was perfected. This is true whether they purchased the furniture for consumer or business use and whether they knew of the security agreement or not.
Under MACRS, the office building is considered nonresidential real property. Land cannot be depreciated. Its class life is 39 years. MACRS requires that the straight-ine method be used to compute the depreciation of 39-year class life property.
Under MACRS, the office building is considered nonresidential real property. Land cannot be depreciated. Its class life is 39 years. MACRS requires that the straight-ine method be used to compute the depreciation of 39-year class life property.
Trademarks acquired as part of the purchase of a business are amortized over 180 months.
Trademarks acquired as part of the purchase of a business are amortized over 180 months.
A taxpayer must recognize income when a capital interest in a partnership is received as compensation for services rendered. The amount of income to be reported is the fair market value of the partnership interest received
A taxpayer must recognize income when a capital interest in a partnership is received as compensation for services rendered. The amount of income to be reported is the fair market value of the partnership interest received
When more than $5,000,000 in securities are being offered, an exemption from the registration requirements of the Securities Act of 1933 is available under Rule 506 of Regulation D. Securities under the Act include debentures and investment contracts.
When more than $5,000,000 in securities are being offered, an exemption from the registration requirements of the Securities Act of 1933 is available under Rule 506 of Regulation D. Securities under the Act include debentures and investment contracts.
