REG mod 35j Flashcards
Are the FUTA payments made by an employer tax deductible?
Yes, this is considered an ordinary and necessary business expense.
What must a taxpayer obtain in order to deduct a contribution made to a qualified organization in an amount greater than $250?
The taxpayer must obtain written acknowledgement from the qualified organization.
What items may be deducted as a moving expense if the distance and time tests are met?
The cost of moving a taxpayer’s belongings, the cost of travel and lodging, and actual auto expenses (or use the standard IRS mileage rate).
What is the treatment of Adjustment items in the AMT calculation?
Adjustments may be added or subtracted in the calculation, depending on the specific adjustment.
When are rental payments received in advance included in gross income?
Rental payments are included in gross income when they are received.
When is income recognized under the cash basis?
When the payment is received or constructively received, in cash or property.
When are state income taxes deductible on Form 1040?
In the year the taxpayer actually paid the tax.
What is the phase-out for the medical expense deduction?
There is not a phase out for medical expense deduction.
When should a farmer include crop insurance proceeds in taxable income?
When received
What are the capital loss limitations for an individual’s tax return?
An individual may deduct up to $3,000 of capital losses per year. Amounts in excess of the $3,000 may be carried forward indefinitely.
Name the AMT Preference items.
Tax-Exempt Interest on certain private activity bonds
Excess of Accelerated Depr over S-L Depr on real property or leased personal property (PRE 1987)
Excess percentage depletion over the adjusted basis of the property
7% of the gain excluded from the sal
What conditions must be met in order for alimony payments to be included in gross income by the payee and deducted from gross income by the payor?
The payment, in cash, must be required by a divorce decree and terminate when the payee dies.
Name some of the deductions to arrive at Adjusted Gross Income.
HSA contributions, Moving expenses (qualified), SIMPLE Plan, Self-Employed health insurance premiums, Investment penalties for early withdrawal (generally a CD), Alimony paid, IRA contributions, Student loan interest, Teacher’s expenses
Under what circumstances may a taxpayer exclude realized gains on the sale of his personal residence?
Realized gains can be excluded up to $250,000 for a single taxpayer if the taxpayer owned and occupied the house, as a principal residence, for at least two of the last five years.
What is the benefit of Section 1244?
Section 1244 allows a taxpayer to deduct the loss on the sale of small business stock as an ordinary loss, if certain requirements are met.
