REG mod 35b Flashcards
A trust will not pay income taxes if…
It distributes all of the income to the beneficiaries.
According to UDITPA, nonbusiness income from capital gains or losses from sale of tangible personal property should be allocated to what state?
To the state in which the property was located at the time of the sale.
All state and municipal bond interest income is taxable at the capital gain rates. True / False
False. State and municipal bond interest income is not taxable.
An AMT tax credit reduces what type of future tax liability?
Regular tax liability- not future AMT tax liability.
Are child support payments deductible by the payee?
No, child support payments are not deductible per the IRC.
Are contributions to an employee’s Simplified Employee Pension plan, made by the employer, taxable to the employee?
No, employer contributions are not taxable to the employee.
Are payments received for punitive damages taxable?
Yes, payments received for punitive damages are included in taxable income.
Are personal exemptions deducted to arrive at AGI or are they deducted from AGI?
Personal exemptions are deducted from AGI.
Are the following items ‘above the line deductions’ or ‘below the line’ deductions?
Alimony payments
Deduction for student loan interest
Moving Expenses
These are above the line deductions. They are deducted from gross income to calculate Adjusted Gross Income (AGI).
At what tax rate is workman’s compensation always taxed at?
Workman’s compensation excluded from gross income per the IRC, therefore it is not taxable.
Can contributions to a Coverdell Education Savings Account be deducted by a taxpayer?
No, however the withdrawal of the funds is tax free if used for education expenses.
Charitable contributions may be deducted on a partnership’s schedule K. True / False
False. The partnership does not deduct charitable contributions; they flow through to the partners.
Contributions to a Roth IRA are deductible on Schedule A. True / False
False. Contributions to a Roth IRA are taxed prior to being contributed into the IRA. Therefore, they are not a deductible expense.
Contributions to an Individual Retirement Account are deductible if…
The IRA is a traditional IRA.
Cosmetic surgery is a deductible medical expense to the extent that is exceeds 10% of the taxpayer’s AGI. True / False
False. Cosmetic surgery is not a deductible medical expense.
