Tax Flashcards
Businesses that need to file returns
S corp
C corp
general partnership
limited partnership
own bus and die
estate can get a deduction as long as expenses incurred are for normal/regular expenses
cost recovery deduction
MACRS:
5yr prop: yr. 1 =20%, yr. 2 = 32%
7 yr. prop: yr. 1 = 14.29% yr. 2 = 24.29%
Straight line:
5 yr. prop: yr. 1 = 10%, yr. 2 = 7.14%
7 yr. prop: yr. 1 = 20%, yr. 2 = 14.29%
5 year property
computers, autos, light duty trucks (1245 prop.)
7 year property
office furniture and fixtures (1245 prop.)
27.5 year property
residential rentals (1250 prop.)
39 year property
nonresidential real property (1250 prop.)
179 deduction
for 1245 property
expenses for purchase of prop. deductible up to net income
Section 1244 sale: tax treatment
up to $100k of loss is OL
any gain on sale is OI
No boot in exchange of land/property
basis = new prop you are getting.
realized gain on exchanged prop
total value received - adj. basis of prop.
recognized gain on exchanged prop
LESSER OF:
realized gain OR boot
no boot: recognized gain = 0
preference items for AMT
IPOD
Intangible drilling costs
oil and gas PERCENTAGE depletion
private activity muni bonds.
depreciation
Phantom income producing investments (for taxes)
private activity muni bonds
alimony (pre 2019) test
noncash items
pmts. to 3rd parties IF made pursuant of divorce for an obligation of the spouse
pmts. to maintain property OWNED by payor spouse and used by payee spouse: NOT Alimony
payee spouse owns life insurance on life of payor
- qualify as alimony if paid under divorce agreement
