SU2 Flashcards
INCOME AND FARMS
1
Q
Gross income does not include discharges of debt that:
(4)
A
- Occur in bankruptcy (except a stock for debt transfer)
- Occur when the debtor is insolvent but not in bankruptcy (max amount that can be excluded is the amount by whch liabilities exceed FMV of assets)
- Are related to qualified farm indebtedness
- Are related to a purchase-money debt reduction in which a seller reduces the debt and the debtor is not in bankruptcy or insolvent. The discharge is treated as a purchase price adjustment.
2
Q
When a taxpayer excludes discharge of indebtedness as mentioned previously, they must reduce his or her tax attributes in the following order
(4)
A
- NOLs
- General business credit
- Capital loss carryovers
- Basis reductions
3
Q
Net Income from SE excludes the following
A
- Rents
- Gain or loss from disposal of prop
- Capital gain/loss
- Nonbusiness interese
- Dividends
- Income/expenses from personal activities
- Wages received as employee
4
Q
Formula: Net earnings from SE =
A
NI from SE - (.0765 x NI from SE)
5
Q
SE person is allowed a deduction for the employer’s portion of FICA taxes paid to arrive at AGI. For 2018 this =
A
- 6.20% of first 128,400 of net SE income PLUS
- 1.45% of net SE income (no cap)
6
Q
9% surtax imposed on
A
- employee’s share of income for high income earnings in excess of 200K
7
Q
Farm optional method
A
