Specialized Returns Flashcards
A taxpayer is classified as a real estate professional if (must meet both):
- More than 1/2 of all activities in the year were real estate activities.
- More than 750 hours.
Can taxpayers deduct a loss from renting a personal residence?
No
Which requirements must an organization meet to file Form 990-EZ? (2 requirements)
- Gross receipts less than $200k
- Total assets at year-end are less than $500k
When must an organization file Form 990-N?
If gross receipts are normally $50,000 or less
What two options are available to qualified farmers to avoid paying penalties?
- File and pay 100% of tax by March 1st OR
- File one estimated payment for 2/3 of tax due by January 15 and file tax return by April 15.
When must an exempt organization make estimated tax payments?
If its estimated tax is expected to be $500 or more
When must a trust fiduciary file Form 1041 (if any of the following apply)?
- Any taxable income for the year
- Gross income of $600 or more
- A beneficiary is a nonresident alien
An employee must be allowed to participate in a SIMPLE plan if the employee (both must apply):
- Received $5,000 in compensation during any of the previous two years
- Is reasonably expected to earn $5,000 for year contributions are made
When can Form 5500-EZ be filed? (Either apply)
- The plan covers the taxpayer (or payer & spouse) and the payer owns the entire business
- The plan only covers one or more partners (or partners & spouses) in a partnership
An organization may qualify as a tax-exempt entity if it is one of these:
ACRE SALT
Animal/Child Cruelty Prevention
Charitable
Religious
Educational
Scientific
Amateur Sports Competition
Literary
Testing for public safety
What defines a qualified farmer?
An individual who derived at least 2/3 of their 2022 or 2023 income from farming operations.
What kind of trust does this describe: “Mandatory income distributions are made annually. Principal distributions are allowed, but not required.”
Simple trust
What is the exemption amount for a decedent’s estate?
$600
What is the exemption amount for a trust that is required to distribute all income currently?
$300
What is the exemption amount for a qualified disability trust?
$4,300
What is the exemption amount for all other trusts?
$100
A trust’s income distribution election is the lesser of:
- Distributions, less tax-exempt income
- DNI, less tax-exempt income
When must Form 5500 be filed each year?
No later than the last day of the seventh calendar month following plan year-end
What is the maximum SIMPLE IRA/401(k) contribution in 2023?
$15,500 ($19,000 is 50+)
A distribution isn’t includible in a beneficiary’s gross income if any of these (3) apply:
- It is required by terms of a will
- It is a gift or bequest
- It is paid out in 3 or fewer installments by terms of the will
What are common examples of repairs to be expensed (NOT CAPITALIZED) on a rental house?
Repainting, fixing gutters, fixing floors, fixing leaks, replacing broken windows
Will a political action committee covered for an exemption from federal income tax?
No
What options does a farmer have for deducting net operating loss (NOL)?
Carry back two years OR carry forward indefinitely
Which (3) are ALL necessary for a farmer to defer crop insurance proceeds into the next tax year?
- Cash method of accounting
- Crop insurance proceeds are paid in year that crops are damaged
- The taxpayer can prove the proceeds should have been received in the following year under normal conditions
