SIM EXAM I Flashcards
ACCORD & SATISFACTION
Parties to a contract agree to a new performance that differs from the original obligation
Accord is the agreement to the new terms and Satisfaction is a the fulfillment of those terms
NOVATION
A new contract substitutes a new party for an old party in an existing contract on the agreement of all parties
US TAX COURT
Is a specialized court that hears Federal Tax Cases
Trials are by judge and not by jury
Bankruptcy Discharges most of pre-petition debts
Nondischargeable debts include:
- Certain Taxes
- Debts incurred by fraud
- Unscheduled debts,
- Debts arising from crimes, fines and penalties
- Alimony/child support debts
- Student Loans
The principal will be bound by the agent’s acts:
- if the agent acted with actual authority OR
- apparent authority, OR
- if the principal ratifies the transaction
The principal can impliedly ratify an unauthorized contract made by an agent on behalf of the principal by:
Accepting the benefits of the contract after learning all material facts of the transaction
Arrive at AGI ( FOR AGI )
Deductions that are subtracted from Gross income to calculate AGI “Above the LINE”
From AGI ( ITemized Deductions )
“Below the Line”
FUTA - Federal Unemployment Tax Act
Credits for this tax are allowed to empowers for certain state unemployment taxes paid by the employer
American Opportunity Credit
First $2,000 X 100% = $2,000
2nd up to $2,000 X 25% = 400
EX: $3,600 qualified expenses
First $2,000 = $2,000
then $1,600 X 25%= 400
Total credit is $2,400 for American Opportunity Credit
Lifetime Learning Credit
Max qualified expenses is $10k per year
AND
The max credit is $2k per year
$10,000 X 20% = $2,000
So it’s 20%of qualifying tuition
For MACRS
Half-year convention applies to personal property
If more than 40% of the total basis of such prop is placed into service during the last quarter then use
Mid-Quarter Convention
Real property is depreciated using the mid-month Convention
FOR MACRs
Real Property & Personal Property
Real Property is Land and everything that is permanently attached
Personal Property is movable items like machinery, equipment and furniture
Security Interest in Accounts
May be perfected by filing
- Not possession bc an account is an intangible that cannot be possessed
- If small-scale assignments they can be an automatic assignment
A taxpayer has 90 Days to file a petition in the federal court System
Taxpayer cannot take a case to court until the IRS sends a notice of deficiency
Failure to Disclose conflict of interest
IRC does not set forth any penalty
A Secured transactions can include
The outright sale of AR
“Any sale of AR”
A Reorganization Plan under Ch 11 will not be approved
Unless the plan provides for the full payment of admin exp
