Specialized Returns Flashcards

1
Q

A taxpayer is classified as a real estate professional if (must meet both):

A
  1. More than 1/2 of all activities in the year were real estate activities.
  2. More than 750 hours.
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2
Q

Can taxpayers deduct a loss from renting a personal residence?

A

No

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3
Q

Which requirements must an organization meet to file Form 990-EZ? (2 requirements)

A
  1. Gross receipts less than $200k
  2. Total assets at year-end are less than $500k
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4
Q

When must an organization file Form 990-N?

A

If gross receipts are normally $50,000 or less

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5
Q

What two options are available to qualified farmers to avoid paying penalties?

A
  1. File and pay 100% of tax by March 1st OR
  2. File one estimated payment for 2/3 of tax due by January 15 and file tax return by April 15.
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6
Q

When must an exempt organization make estimated tax payments?

A

If its estimated tax is expected to be $500 or more

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7
Q

When must a trust fiduciary file Form 1041 (if any of the following apply)?

A
  1. Any taxable income for the year
  2. Gross income of $600 or more
  3. A beneficiary is a nonresident alien
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8
Q

An employee must be allowed to participate in a SIMPLE plan if the employee (both must apply):

A
  1. Received $5,000 in compensation during any of the previous two years
  2. Is reasonably expected to earn $5,000 for year contributions are made
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9
Q

When can Form 5500-EZ be filed? (Either apply)

A
  1. The plan covers the taxpayer (or payer & spouse) and the payer owns the entire business
  2. The plan only covers one or more partners (or partners & spouses) in a partnership
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10
Q

An organization may qualify as a tax-exempt entity if it is one of these:

A

ACRE SALT

Animal/Child Cruelty Prevention
Charitable
Religious
Educational

Scientific
Amateur Sports Competition
Literary
Testing for public safety

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11
Q

What defines a qualified farmer?

A

An individual who derived at least 2/3 of their 2022 or 2023 income from farming operations.

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12
Q

What kind of trust does this describe: “Mandatory income distributions are made annually. Principal distributions are allowed, but not required.”

A

Simple trust

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13
Q

What is the exemption amount for a decedent’s estate?

A

$600

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14
Q

What is the exemption amount for a trust that is required to distribute all income currently?

A

$300

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15
Q

What is the exemption amount for a qualified disability trust?

A

$4,300

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16
Q

What is the exemption amount for all other trusts?

17
Q

A trust’s income distribution election is the lesser of:

A
  1. Distributions, less tax-exempt income
  2. DNI, less tax-exempt income
18
Q

When must Form 5500 be filed each year?

A

No later than the last day of the seventh calendar month following plan year-end

19
Q

What is the maximum SIMPLE IRA/401(k) contribution in 2023?

A

$15,500 ($19,000 is 50+)

20
Q

A distribution isn’t includible in a beneficiary’s gross income if any of these (3) apply:

A
  1. It is required by terms of a will
  2. It is a gift or bequest
  3. It is paid out in 3 or fewer installments by terms of the will
21
Q

What are common examples of repairs to be expensed (NOT CAPITALIZED) on a rental house?

A

Repainting, fixing gutters, fixing floors, fixing leaks, replacing broken windows

22
Q

Will a political action committee covered for an exemption from federal income tax?

23
Q

What options does a farmer have for deducting net operating loss (NOL)?

A

Carry back two years OR carry forward indefinitely

24
Q

Which (3) are ALL necessary for a farmer to defer crop insurance proceeds into the next tax year?

A
  1. Cash method of accounting
  2. Crop insurance proceeds are paid in year that crops are damaged
  3. The taxpayer can prove the proceeds should have been received in the following year under normal conditions
25
Q

Do grantor trusts use Schedule K-1 to report income to beneficiaries?

26
Q

The sale of livestock held for breeding, dairy, sport, or draft is treated as what kind of gain?

A

Section 1231