Tax

Question 1

Individual income tax formula

Answer 1

Gross income
- Adjustments (above the line)
= AGI
- Itemized or standard deduction (greater of)
- Personal exemptions
= Taxable Income
* Tax Rate
= Gross Tax Liability
- Credits
= Net Tax Liability or Refund Receivable
(3)

Question 2

Individual investment income amount realized

Answer 2

Total money received&to be received
+FMV of property received and to be received
+Amount of liabilities transferred with the property
-Any selling expenses
= Amount realized
(3.3.7)

Question 3

Gain realized (individual investment income)

Answer 3

Amount realized
-Adjusted basis
=Gain(loss) realized
(3.3.7)

Question 4

Adjusted basis - AB (individual investment income)

Answer 4

Basis on acquisition (cost)
\+ Debt on property
\+/- adjustment to basis (depreciation/improvements)
= AB
(3.3.7)

Question 5

Taxable social security benefits (SSB)

Answer 5

PIPI>ABA; 50% SSB; PI>ABA 85% SSB (3.4.10)

Question 6

PI (provisionsal income)

Answer 6

Tax-exempt interest (excluding foreign income)+50% SSB (3.4.10)

Question 7

Base amount (BA)

Answer 7

32K MFJ; 0 Married Filing Separate and Lived Together During Year (MFSLT); 25K others (3.4.10)

Question 8

ABA (adjusted base amount)

Answer 8

44K MFJ; 0 MFSLT; 34K others (3.4.10)

Question 9

Gross income - GI (Self-Employment)

Answer 9

Gross sales (receipts)
- COGS
\+ Other GI (rents, etc)
= Business GI
(4.1.1)

Question 10

COGS (Self-Employment)

Answer 10

BI
+ Purchases
-EI
= COGS (4.1.1)

Question 11

FTC (foreign tax credit)

Answer 11

US Income Tax*(foreign source taxable income)/(worldwide taxable income) (5.3.2)

Question 12

AMT

Answer 12

TI
\+ Tax preferences
\+ personal exemptions
\+ standard deduction (if don't itemize)
\+/- certain other adjustments
=AMTI (alternative minimum taxable income)
* alternative minimum tax base
* rate (%)
= tentative minimum tax
- regular income tax
=AMT (5.4.1)

Question 13

allocable cost (basis) - lump-sum assets

Answer 13

(fmv asset)/(fmv all assets purchased)*(lump sum purchase price) (6.1.3)

Question 14

Income tax formula (Corporate)

Answer 14

Income
- Exclusions
= GI
- Deductions
= TI
* Tax rate
= Gross regular tax liability
- Credits
= net regular tax liability
\+ AMT
\+ FICA
\+ Special taxes
= tax liability/refund receivable
(7.1.6)

Question 15

Amount realized (capital gain or loss)

Answer 15

Money received (or to be received)
\+FMV of other property received
\+Liability relief (whether nonrecourse or recourse)
- Money or other property given up
- Selling expenses
- Liabilities assumed
=Amount realized
(6.3)

Question 16

Gain realized (capital gain or loss)

Answer 16

Amount realized
-Adjusted basis
=Gain (loss) realized
(6.3)