Review Flashcards
Which of the following is considered a security under Securities act of 1933, limited partnership interest or a general partnership interest?
a limited partnership interest
what is an acceleration clause?
A contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan if certain requirements are not met. An acceleration clause outlines the reasons that the lender can demand loan repayment. Also known as “acceleration covenant”.
If someone refuses to perform services that they had contracted to perform, what remedy is not available to the person that was to have received the services?
specific performance, The remedy of specific performance is not available for breach of a personal service contract. It would violate the constitutional amendment prohibiting involuntary servitude. Therefore, Bale will be unable to obtain a judgment ordering Lark to perform.
Property that is bequeathed to a TP, what is the TP’s basis in the property and what is the holding period?
always long term, and the basis is the FMV
When a corporation has an unused net capital loss that is carried back or carried forward to another tax year, is it treated as ST or LT?
An unused net capital loss is always carried back and forward as a short-term capital loss whether or not it was short-term when sustained.
what is included in MACRS 5 year property?
- cars
- light or heavy general purpose trucks
- computers
- copiers
- peripheral equipment
What is included in MACRS 7 year property?
- furniture, fixtures, equipment
- agricultural machinery/equipment
a married TP sold Section 1244 small biz stock at a loss of $157k. how much of the stock is deductible?
$103,000.
A married TP can deduct up to $100k of losses for Section 1244 stock. The remaining $57k loss is a LT capital loss of which $3k is deductible.
should donated items to a TP that are later donated to a charity be included in gross income?
yes, the FMV of these items should be included in the gross income of the TP and can then be deducted as a charitable contribution when donated
what is earned income defined as, when calc the amount a self employed TP may contributed to a keogh plan?
net self-employed earnings less the deductible keogh contribution, less one-half of the self employment tax
what is the age limit that counts as “early distribution” from a retirement account
59.5
what type of rate is a TP taxed at when withdrawing from an IRA
the marginal rate
what is the % of AGI limit for individual charitable contributions
Limited to 30% if stock
are buy-sell agreements excluded from a decedents estate?
yes if:’
- bona fide business agreement
- is not a device to transfer property to the decedents family for less than full and adequate consideration and - has terms similar to those entered into by persons in arms length transaction
calc NOL
salary minus casualty loss
don’t take into account, capital losses or personal exemption
if a TP actively participates in rental activity, how much of a loss can he deduct for rental losses
One can deduct up to $25,000 of rental losses. Reduced by 50% of amount of AGI over $100k.
Remaining loss suspended
what is the rule of interest free loans from parents to their children?
if it exceeds $10,000. each year that the loan is outstanding, the interest that should have been paid is considered a gift from the parents
what are the requirements to deduct an ordinary loss on sale or worthlessness of section 1244 stock
- the SH must be the original holder of the stock and an individual or partnership
- the stock can be common or preferred, voting or nonvoting
- the amount of ordinary loss is limited to $50,000 ($100 joint)
- the corp during the last 5 year period before the year of the loss received less than 50% of its total gross receipts from royalties, rents, dividends, interest, annuitities and gains from sales or exchange of stock or securities
- the corps aggregate amount of money and adj basis of other property received for stock as a contribution to capital and paid-in surplus does not exceed $1,000,000.
what is the max deduction for a section 1244 loss?
$50,000
