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REG > Taxable vs. Nontaxable > Flashcards

Taxable vs. Nontaxable Flashcards

1
Q

Prizes and Awards

A

Taxable

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2
Q

Personal (Physical) Injury or Illness Award

A

Nontaxble

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3
Q

Taxable or Nontaxable?

Employee Adoption Assistance Program

A

Nontaxable; up to $16,810

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4
Q

Casualty/Theft Loss attributed to federal disaster

A

Taxable in excess of $100 floor and 10% of AGI

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5
Q

Self-employed health insurance

A

Taxable

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6
Q

Taxable or Nontaxable?

Nonqualified Roth IRA Distribution

A

Nontaxable (Principal earning)
Taxable (Earnings)

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7
Q

Workers’ Compensation

A

Nontaxable

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8
Q

Charitable Contributions

A

Taxable

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9
Q

Gifts and Inheritances

A

Nontaxable

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10
Q

Taxable or Nontaxable?

Child Support

A

Nontaxable

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11
Q

Distibutions to Partners and Shareholders

A

Nontaxable

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12
Q

Taxable or Nontaxable?

Dividend Income

A

Taxable depending on company’s earnings and profits
For example, if there are no earnings and profits and taxpayer has basis in stock, it is nontaxable

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13
Q

Taxable or Nontaxable?

Qualified Roth IRA Distribution

A

Nontaxable (Principal earning)
Nontaxable (Earnings)

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14
Q

Wages

A

Taxable

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15
Q

Taxable or Nontaxable?

Taxpayer lives longer after the expected life of the annuity.

A

Taxable

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16
Q

Student Loan Interest

A

Taxable

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17
Q

Taxable or Nontaxable?

Interest Income from state and local goverment bonds/obligations, bonds of a U.S. Possession, U.S. Series EE Savings Bonds

A

Nontaxable

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18
Q

State/local taxes
(Property and either income or sales)

A

Taxable, up to $10,000

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19
Q

Medical Expenses

A

Taxable in excess of 7.5% AGI

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20
Q

Punitive Damages

A

Taxable

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21
Q

Taxable or Nontaxable?

Return of Capital

A

Nontaxable

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22
Q

What is the difference between taxable versus nontaxable?

A

Taxable refers to the portion of income that is subject to tax and nontaxable refers to the portion of income that is not subject to tax

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23
Q

Interest Expense (home and investment)

A

Taxable

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24
Q

Earnings (e.g. pension and annuity)

A

Taxable, depending on fixed period or life annuity

In addition earnings are taxed at ordinary income

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25
Q

Taxable or Nontaxable?

Employer Payment of Employees’s Educational Expenses

A

Nontaxable; up to $5,250

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26
Q

Taxable or Nontaxable?

Capital Gain/Loss

A

Taxable

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27
Q

Taxable or Nontaxable?

Qualified Non-Roth Retirement Plans

A

Nontaxable for the most part, however, benefits recieved in the year which the amount was distributed or made available to employee are taxable as ordinary income

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28
Q

Social Security Income

A

Taxable depending on AGI
50-85%

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29
Q

Taxable or Nontaxable?

Property Settlement

A

Nontaxable

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30
Q

Taxable or Nontaxable?

Forfeited Interest (Penalty on Withdrawal from Savings)

A

Taxable

31
Q

Income tax from net business income

A

Taxable

32
Q

Taxable or Nontaxable?

Transit Passes

A

Nontaxable

33
Q

K-1 Flow-Through Income/Loss

A

Taxabale

34
Q

Gambling Winnings and Losses

A

Taxable

35
Q

Self-employed retirement

A

Taxable

36
Q

Unemployment Compensation

A

Taxable

37
Q

Life Insurance Proceeds

A

Nontaxable

38
Q

Taxable or Nontaxable?

Qualified Employee Discounts

A

Nontaxable

39
Q

Taxable or Nontaxable?

State and local tax refunds if itemized in prior year

A

Taxable

40
Q

Rental Income/Loss

A

Taxable

41
Q

Taxable or Nontaxable?

Stock Dividend

A

Nontaxable; unless there is the option for cash or property

42
Q

Taxable or Nontaxable?

Property Settlements

A

Nontaxable

43
Q

Taxable or Nontaxable?

De Minimis Fringe Benefit

A

Nontaxable

44
Q

Foreign-Earning Income

A

Nontaxable

45
Q
A
46
Q

Medicare Benefits

A

Nontaxable

47
Q

Taxable or Nontaxable?

Employer-Provided Parking

A

Nontaxable

48
Q

Taxable or Nontaxable?

Life Insurance Coverage

A

Nontaxable

49
Q

Taxable or Nontaxable?

Interest Income from federal bonds, industrial development bonds, corporate bonds, part of the proceeds from an installment sale, interest paid by federal or state government for late payment of a tax, and gifts given by a bank for opening a bank account

A

Taxable

50
Q

Return on Investment (i.e. your contributions)

A

Nontaxable

51
Q

Taxable or Nontaxable?

Alimony/Spousal Support Payments

A

Taxable, if divorce or separation agreement executed on or before Dec. 31, 2018
Nontaxable, if divorce or separation agreement executed after Dec. 31, 2018

52
Q

Taxable or Nontaxable?

Nondeductible Tradtional IRA Distribution

A

Nontaxable (Principal earning)
Taxable (Earnings)

53
Q

Accident Insurance: Premiums paid by taxpayer

A

Nontaxable

54
Q

Taxable or Nontaxable?

Deductible Traditional IRA Distribution

A

Taxable
(Principle and Earnings)

55
Q

Moving Expenses

A

Taxable only for members of the armed forces moving due to military order

56
Q

Scholarships and Fellowships

A

Taxable

57
Q

Taxable or Nontaxable?

Dependent Care Assistance

A

Nontaxable; up to $5,000

58
Q

Taxable or Nontaxable?

Flexible Spending Arrangements (FSA)

A

Nontaxable

59
Q

Taxable or Nontaxable?

Meals and Lodging

A

Nontaxable, unless lodging must be required as a condition of employment

60
Q

Guaranteed Payments to Partners

A

Taxable

61
Q

Taxable or Nontaxable?

Qualified Tuition Reduction

A

Nontaxable

62
Q

Taxable or Nontaxable?

Stock Split

A

Nontaxable

Allocate original basis over new shares held (i.e. Total Basis / Adjusted Shares)

63
Q

Taxable or Nontaxable?

Life Insurance Dividend

A

Nontaxable

64
Q

Self-employment tax from net business income

A

Taxable

65
Q

Taxable or Nontaxable?

State and local tax refunds if standard deduction was used in prior year

A

Nontaxable

66
Q

Tuition Reductions

A

Taxable

only included in taxes if it’s their only compensation

67
Q

Cancellation of Debt (COD)

A

Taxable

68
Q

Hobby Income

A

Taxable

69
Q

Merchandise Discount

A

Nontaxable

70
Q

Service Discount

A

Nontaxable; limited to 20%

71
Q

Employer Provided Parking

A

Nontaxable; limitied to $315

72
Q

Transit Passes

A

Nontaxable; limited to $315

73
Q

What are the three tax-exempt interest income that must be reported, but excluded from gross income?

A
  1. State and Local Government Bonds/Obligations
  2. Bonds of a U.S. Possession
  3. U.S. Series EE Savings Bonds

REG (10 decks)

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