Tax Planning

Question 1

List the tax flow for AMT

Answer 1

Regular taxable income

Add: tax preference items

Add: standard deduction (if TP does not itemize)

Add/Subtract: AMT adjustments and tax preference items

AMTI (Alternative Minimum Taxable Income)

Less: Exemption Amount (phased out at higher incomes)

AMT base

Times: AMT tax rate(s)

Gross AMT tax

Less: AMT foreign tax credit

Tentative minimum tax (TMT)

Less: Regular tax liability

AMT* (If tentative minimum tax exceeds the regular tax, the difference is the AMT)

Question 2

What is the max charitable contribution that can be made for a private foundation if one donates stock held for 7 months?

Answer 2

30% of AGI

Question 3

What is the max charitable contribution that can be made for a private foundation if one donates stock held for 15 months?

Answer 3

20% of AGI if donor elects FMV of the LTCG or 30% of AGI if donor elects basis of the LTCG

Question 4

What is the max charitable contribution that can be made for a private foundation if one donates a cash gift?

Answer 4

30% of AGI

Question 5

What is the max charitable contribution that can be made for a public charity if one donates a cash gift?

Answer 5

60% of AGI

Question 6

What is the max charitable contribution that can be made for a public charity if one donates art?

Answer 6

50% of AGI

Question 7

What is the max charitable contribution that can be made for a public charity if one donates inventory?

Answer 7

50% of AGI

Question 8

What is the max charitable contribution that can be made for a public charity if one donates ordinary income property or a STCG?

Answer 8

50% of AGI

Question 9

What is the max charitable contribution that can be made for a public charity if one donates stock that was held for 12+ montha?

Answer 9

30% of AGI if the donor elects to use FMV; 50% of AGI if the donor elects to use Basis

Question 10

What is the max deduction available on student loan interest in 2023?

Answer 10

$2,500, subject to phaseouts

Question 11

What is income the phaseout range for an active participant in rental properties?

Answer 11

100-150k. Subtract the AGI amount from the max limit, then divide that number by 2 to get the max allowed deduction for the year

Question 12

When loans are greater than $10,000 and up to and including $100,000, the imputed interest is the lesser of:

Answer 12

the AFR or
the borrower’s net investment income

Question 13

What may a taxpayer deduct regarding unreimbursed expenses incurred incident to contribution of services to a charity?

Answer 13

out-of-pocket transportation expenses,
the cost of lodging, and
the cost of meals while away from home. If a taxpayer elects NOT to deduct their actual costs of operating an automobile while performing the donated services, the law permits a deduction of $0.14 cents per mile.

Question 14

A performing artist is permitted to deduct business expenses in 2023 if:

Answer 14

Performing arts services for two or more employers.

$200+ received from each
Expenses exceed 10% of gross income received
AGI < $16,000