Tax Flashcards
2(b)(1)
Defines “head of household”
11
Corporation under TCGA taxed at 21%
61(a)
Defines "gross income" to include among others: -compensation INCLUDING fringe benefits -interest -rents -dividends -Life insurance/annuity payouts -
62(a)
Adj gross income= gross income minus ( list of) ABOVE the line deductions
- ie. business expenses
- ie. losses
63(a)-(e)
Below the line deductions to compute taxable income OR take the standard deduction.
83(a)
Default for fringe benefit of property that faces substantial risk of forfeiture is to only record the income (as ^ fmv) when the risk of forfeiture elapses.
–Effectively treating it like compensation for services, so no cg treatment
83(b)
Optional election to treat fringe benefit of property as income in the year it is received, at which point it is subject to cg treatment.
83(h)
Business that gives fringe benefit of property can take a deduction under 162 in the yr in which the employee takes the income
119(a)
Meals and lodging fringe ben. to employee/spouse/dependents IFF for convenience of employer can be excluded:
- meals must be on the premises
- lodging on employer premises is a condition of employment
119(b)
If meals served on business premises to 50% of employees, deemed as “for the convenience of the employer”
–special provisions that “convenience of employer” doesn’t account for either if the meals need to be paid for, or if employee can opt not to take them.
132(a)
Exclusion of specific fringe benefits (as defined in later sections)
132(b)
No additional cost service defined as:
- cost in the ordinary course of business
- employer incurs no substantial additional cost, including foregone revenue
132(c)
Qualified employee discount defined as:
–discount with different maximums for property and services
132(d)
Working condition fringe defined as:
-if the employee had paid for the property or services, they would have been entitled to a deduction under 162 or 167 (think the comfortable office chair)
132(e)
De-minimis fringe:
–for eating: feeding is de minimis if (a) on or near the business premises and (b) at least cost neutral.
-non-discrimination on the feeding facility
132(f)
Qualified transportation fringe:
§132(f)(2)— limited to $175/month subject to inflation adjustment.
Parking and transit passes treated the same way
§274(a)(4)—employer can no longer deduct the travel expenses. (and non-profits now treated the same way)
- includes employer reinbursement for travel, so long as voucher not an option
- transportation not included under other fringe exclusion provisions
132(h)
Defines “employee” for fringe benefits provisons
–special allotment for “parents” in air-transportation cases.
132(j)
Special provisions for fringe benefits:
- non-discrimination provision to 132(b) & (c)
- gym facility on site not income
132(l)
**special section that tells you about interactions with other sections like §132(e) and (g) Doesn’t provide for fringe benefits expressly provided for in other sections of the code.
o Eg. Housing is provided for in §119, so can’t rely on §132 for that exclusion, which is why you need §83.
274(n)
50% deduction to employer for meals from 2018-2025
274(o)
After 2026, no deduction to employer for meals
275(a)
can’t deduct social security/other taxes
274(a)
No deduction to employer for entertainment related expenses, or for qualified transportation fringe
274(b)
No deduction to business gifts in excess of $25 to any individual (w/ exception for promotional materials)
274(e)
Limitation on deduction of entertainment expenses (1) excludes food and drink on the premises (2) can be deducted IFF the employee elects to treat is as income and (3) reimbursed expenses where services are performed for the employer or a 3rd party (eg. client).
274(k)
Food or beverage deduction limited to expenses (a) not lavish or extravegant under the circumstances and (b) where employer or agent is present
274(m)
for company to deduct spouse’s costs must be (a) an employee (b) for business purpose (c) otherwise deductable.
104(a)
When you don’t have employer provided health insurance, parallels §105, in that the insurance payments to medical facilities are not taxed as income.
105(a)-(b)
Can exclude payments from insurance policy, so long is that is actually providing “healthcare” and not cosmetic etc… (therefore references §213)
106(a)
employer provided health care, not included in the employer’s income (ie. the premium the employer pays for the policy on your behalf)
213(a)
If no employer sponsored insurance, employee can deduct cost of insurance BUT only if the cost of the insurance is more than 10% of AGI (7.5% just for 2018) deduct the difference.
o §162(l)—if self-employed, you can get the exclusion, the same as if you were an employee.
213(b)
Medical costs of drugs only excluded if proscribed by doc.
213(d)
Defines medical care to in most cases exclude cosmetic medicine.
262(a)
No deduction for personal, living, or family expenses
74(a)
prizes and awards are income.
74(b)
prize/award excludable if transferred to non-profit
102(a)
gifts/bequests are NOT income
102(b)
income from property that is a gift/bequest is an exception to the general rule and still considered income
102(c)
Gifter/giftee choice for business gift–employee gifts (over $25 can’t be excluded if the employer takes a deduction for them (ball in the employee’s court though)
162(a)
Business Deduction generally (above the line)– deduction allowed for “ordinary and neccesary” expenses and “reasonable
salary/ compensation and traveling expenses
162(b)
charitable contributions/gifts not deductible as business expense.
162(c)
bribe/kickback/”other illegal payment” not deductable
162(f)
payments of gov. or “self-regulatory body” penalties are not deductible, unless made as restitution (and so identified in the papers)
162(g)
anti-trust payments re. private right of actions (treble damages) not deductable
