SU 4 Self-Employment, Farming, Adjustments Flashcards
Travel
no deduction if
- primarily personal
- for TP’s spouse (unless for business purpose or employee)
- commuting between home & work
- attend investment meetings
- travel as form of education
Foreign travel
allocate between personal Y business
no allocation if
-trip lasted
Car exp
actual exp are deductible
-svc, repairs, gas
Taxes
property tax on real/person is itemized
-business property- tax is business exp
itemized deduction for general state & local sales tax or state income tax (not both)
Self-employed person deducts
employer’s part of FICI to get AGI
6.2% of 1st 118,500 + 1.45% of net self-employment income
Bad debt
business -partially worthless, deduct to extent worthless & written off -ordinary loss must use write off method nonbusiness -investments aren't trade/business -partially worthless not deductible -wholly worthless is STCL
Rental property
Schedule E 179 deduction not allowed for rental property rental expenses above the line deduction must rent for > 14 days to deduct don't report income if rented
Vacation home rules
TP uses for personal purpose for greater of a) more than 14 days or b) > 10% of days residence rented
DPGR
gross receipts from sale/exchange, disposition, rental, lease, license of
-qualified production propery mfr, grown in US
-film produced by TP in US
-electricity, gas, water produced by TP in US
contstrution in US
engineering, architect svcs performed in US for construction project located in US
DPGR calcuation
don’t include related parties
lesser of
-9% QPAI, 9% TI, 50% W2
Fringe transportation
exclude max of 250/month for transport
-parking, commuter highway vehicle
Employer provided Educational assistance
exclude up to 5,250 for employer provider assistance
-don’t include cost of meals, lodging, transport, tools, supplies retained after course
Dependent care assistance
exclude lesser of 5k (2500 MFS) or lesser of earned income of employee or employee’s spouse
Incentive Stock Option
recognize LTCG if sold at least 2 years after option granted & 1 year after excercised
-no employer deduction
if sold & doesn’t meet above reqs, the FMV on date of exercise over option price = OI
-employer can deduct
-g realized = ST/LTCG
Student loan interest
above the line deduction
deduct 2500 of interest pd on loan
phaseout when AGI>65k ends @ 80k (130k-160k MFJ)
2500 * (AGI-65k) divided by 15k or phaseout range
