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CFP > Tax > Flashcards

Tax Flashcards

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1
Q

AOTC

A

100% of the 1st $2,000 education expenses
+25% of the next $2,000 education expenses
Max: $2,500 per kid

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2
Q

Lifetime Learning Credit

A

20% of ed expenses up to $10k
Max: $2,000 per family

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3
Q

Child Tax Credit

A

$2k/kid

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4
Q

Child & Dependent Care Credit

A

$3k/6k

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5
Q

Grants

A

Pell and Supplemental Educational Opportunity Grant (SEOG): exceptional need

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6
Q

Scholarships

A

Are always tax free

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7
Q

Federal Direct / Stafford Loans: Direct Subsidized

A

Direct Subsidized: Must have financial need. Undergrad only, better terms, govt pays while in school and 1st 6 months and if you defer payment

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8
Q

Direct PLUS

A

All college+. NO financial need required. You pay all interest

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9
Q

Federal Direct / Stafford Loans: Direct Unsubsidized

A

All college+, no financial need required. You pay all interest

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10
Q

Expected Family Contribution

A

Assets (5.64% of parents, 20% of students) + Income (22-47% of parents, 50% of students -$9,410)

Only parent assets excluded are home and retirement

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11
Q

What income is backed out from AGI for EFC calc?

A

Distributions from Coverdell (student) and Roth IRA

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12
Q

what debt can’t be forgiven if you file Chapter 7?

A

alimony, child support, taxes < 3 years due, student loans, secured debt

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13
Q

Which risk is qualitative: tolerance or capacity?

A

Tolerance

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14
Q

Mortgage payments: beg or end?

A

END

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15
Q

Education Calc Steps 1-3

A

1: Project FV of 1 year of tuition
2: Calc PV of of that amount:
BEG
pmt=FV from step 1
i=(ROR-INF)/(1+INF)
n=4
3: Calc what they’re asking for (pmt or PV)
BEG or END
i=ROR, n=years to college, FV=step 2 result

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16
Q

Mortage payments: beg or end?

A

END

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17
Q

FICO Score Calc

A

Payment history (35%)
Amounts owed (30%)
Length of credit history (15%)
New credit (10%)
Credit mix (10%)

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18
Q

Basis for Gift with Gift Tax Paid Formula

A

Donor’s Basis +
Gift Tax Paid X (App/(Gift-$18k))

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19
Q

FICO

A

.800. Exceptional
.740. Very good
.670. Good.
.580. Fair

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20
Q

how much Student loan interest is deductible?

A

$2,500

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21
Q

2 Mortgage interest deduction

A

$750k/mortgage amount X intexp

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22
Q

Refundable Tax Credits?

A

Additional American Earned Premium
(All Americans Eat Pie)

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23
Q

how do you qualify for Head of Household?

A

Must not be married, pay >50% of housing costs. Qualifying kid>50% of year, Qualifying relative 50%+ living expenses

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24
Q

Estimated tax payment dates

A

3, 5, 8, 12

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25
Q

what percent of last year and this years tax must you pay to avoid tax penalty?

A

Lesser of:
$0-150k: 100% LY, 90% TY
$150k +: 110% LY, 90% TY

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26
Q

Tax penalties - Negligence, Fraud, Frivolous?

A

20%, 75%, $5k

27
Q

Fail to file, fail to pay

A

5%, 0.5%

28
Q

1098

A

Mortgage interest

29
Q

1099-R

A

Retirement distributions

30
Q

Form 4868

A

Extension of time to file

31
Q

Form 5498

A

IRA contributions

32
Q

Form 8606

A

Nondeductible IRAs

33
Q

FIFO, LIFO inventory when prices higher

A

FIFO: inventory realistic
LIFO: inventory understated

34
Q

MACRS years cars/computers

A

5 years

35
Q

MACRS machines/equipment

A

7 years

36
Q

MACRS resi and CRE

A

27.5 / 39 years

37
Q

What’s not a capital asset?

A

A/R
Copyrights
Inventory
Depreciable property used in biz

38
Q

Section 1231. Sold over orig cost? 1245 / 1250

A

Cap gains, dep @ ord income / 25%

39
Q

Section 1231 sold under cost 1245 / 1250

A

Ordinary loss for both

40
Q

Section 1231 Sold between cost and adj cost 1245 / 1250

A

Ord income rate / 25%.

41
Q

1231 Like Kind Amount Realized

A

FV-BV + Boot (cash received + mortgage dumped)

42
Q

1031 Realized Gain

A

Amount realized less BV of asset transferred

43
Q

1231 Recognized Gain

A

Lesser of (Realized Gain, net boot received)

44
Q

what qualifies for your property to be “Rental real estate”?

A

did you use the property for personal use the greater of 14 days or 10% of days rented? if no then it’s a rental.

45
Q

Rental use property

A

You use it greater than (14 days, 10% of all days rented). All expenses are allowed.

46
Q

Mixed use property

A

You use it less than (14 days, 10% of all days rented). All expenses X (personal use days / total use days)

47
Q

Cash gifts limit as percent of AGI

A

60% of AGI / 30% of AGI

48
Q

Ordinary income gifts (STCG, Art, Inventory)

A

50% of AGI / 30% of AGI

49
Q

LTCG using FMV

A

30% of AGI / 20% of AGI

50
Q

LTCG using BV

A

50% of AGI / 30% of AGI

51
Q

Use related gifts to charity max donation

A

50% of AGI if BV
30% of AGI if MV

52
Q

Use unrelated gifts to charity max donation

A

Lesser of BV or MV

53
Q

Charity deduction for services

A

Tolls + (gas and parking or 14c/mile)

54
Q

Imputed interest income

A

None on <$10k loan
AFR on > $100k loan
Min (net inv inc or AFR) on loans 10-100k; if NII < $1k, then $0

55
Q

AMT adjustment at option exercise

A

(Exercise - Grant) X Shares

56
Q

Kiddie Tax

A

0% on $0-1300
10% on $1300-2600
Parents top tax bracket >$2600

57
Q

Net investment income and NII Tax

A

On MAGI over $200/250k, 3.8% X lesser of (NII or excess of MAGI over $200/250k)

58
Q

FACTA: US accounts overseas unmarried or separate

A

$50k/75k

59
Q

FACTA: US accounts overseas MFJ

A

$100/150k

60
Q

FACTA: Foreign account limits to report last day / any day

A

If foreign unmarried/separate : $200/300k
If foreign and MFJ: $400/600

61
Q

FBAR: Must report FinCEN Form 114 if…

A

Foreign accounts >$10k combined.

62
Q

AMT - if you’re subject to it this year should you accelerate income?

A

Yes

63
Q

AMT - if you’re subject to it this year should you defer deductions?

A

Yes

CFP (7 decks)

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