REG Deck 3 Flashcards
True or false: Sometimes a farmer can be involuntarily petitioned into bankruptcy
FALSE
True or false: A sale of collectibles is a separately stated item on a K-1.
TRUE
True or false: Generally there is recognition of compensation income for incentive stock options
FALSE
Student loan interest expense is limited to $__500, and it is phased out for Single at $_________ and for married at $175000
2,500 and 85,000
A nonliquidating cash distribution is not taxable income to the partner unless it is greater than the partner’s basis. A nonliquidating distribution of property is ________ taxable.
NEVER
Do capital gain Dividends count for the netting of long-term and short-term capital gains?
YES, you would STILL net them against other capital gains
Don’t forget, capital losses can only be taken to the extent of a partner’s tax basis!
Apparently, limited partnership losses are not included in Adjusted Gross Income!
For the dividends received deduction, the investing coporation has to have the stock for a minimum of ____ days
45
True or false: Oral contracts for the sale of SPECIFICALLY manufactured goods are enforceable, even when above $500
TRUE
True or false: Cash distributions from a partnership do NOT affect AGI unless they go past the partner’s basis
TRUE
When a liquidation of an 80% or more owned subsidiary happens, the parents takes the _____________ basis in the assets it receives from the subsidiary
CARRYOVER
Child and Dependent Care Credit is only for children under ____, and is limited to the spouses with least wages
13
Married taxpayers may deduct $100,000 of loss on Section 1244 stock as _____ loss, any amount above this is considered capital and is subject to normal capital loss limitations for individuals
ORDINARY
Section 1245 recapture only requires that either the lesser of the depreciation taken or the _____ recognized be recaptured. Excess depreciation is IRRELEVANT for 1245.
GAIN
Extension payments DO count towards overpayment of taxes
For stock ownership tests, neither in-laws nor ______ are considered family members
COUSINS
If the FMV at the time of a gift is used as the Tax Basis, then they holding period starts from the date the gift was received instead of the donors holding period
Don’t forget that S Corporation Shareholders can have DEBT basis in an S corp. So if they loan money to the company, that DOES matter because that gives them debt basis to take losses against
Loan’s 13,000 to a the company, and company pays off 3000 by end of year. That would give the shareholder 10,000 remaining DEBT BASIS to take losses against along with the normal tax basis
For the qualifying relative test, is Social Security included in the $4,000 income limitation?
NO
True or false: The ability to deduct student loan interest expenses CANNOT be taken if the taxpayer is claimed as a dependent of another taxpayer.
TRUE
Distributions are allocated Pro Rata to Current E&P
Current E&P of 30,000
Distribution 1 = 42,000
Distribution 2 = 33,000
42,000 + 33,000 = 75,000
42,000 / 75,000 = 56%
56% * 30,000 = 16,800 of Distribution 1 is applied to Current E&P
True or false: Premiums on disability insurance count as unreimbursed medical expenses that can be itemized
FALSE, since insurance it to give him income while he’s injured and is not for any specific medical need currently
If an LLC has elected to be classified as a corporation, a change in number of shareholders DOESN’T CHANGE it’s classification as an LLC
