TCP3 Flashcards
A distribution from a corporation to the extent of what is considered dividend income?
To the extent of accumulated and current E&P and the shareholder’s basis.
Contributing property to a corporation is not taxable when what occurs?
When the 80% test is met, meaning control of the Corp is 80% owned by the contributing shareholders.
What is considered basis to a corporation in a contribution of property?
The basis to the Corp is the carryover basis of the contributed property plus cash paid to the taxpayer by the Corp, also know as boot received by the taxpayer.
What is the standard deduction for a single taxpayer in 2024?
$14,600 is the standard deduction for a single taxpayer. If their earned income is less than this, it is the earned income plus $450 not to exceed the $14,600.
What is the max IRA contribution in 2024?
The max IRA contribution is 7,000 for 2024 and $1,000 more for someone who is 55 years and older.
Are losses deductible by a C Corp?
No, losses on a non-liquidating distribution are not deductible.
How does a C Corp treat distribution of an asset?
The C Corp will recognize gain on sale as if sold when distributed to the shareholders and then add it to E&P and use E&P to distribute dividends.
Do simple trusts always have to have been a simple trust?
No, simple trusts could have previously been a complex trust.
What is worthless stock limit and treatment?
Worthless stock is ordinary loss and MFJ couple can take up to $100K limit then any excess can be taken as a capital loss restricted to the $3k capital loss rules and carry forward the rest.
Complex trusts can distribute what that simple trusts can’t distribute?
Complex trusts can distribute principal. Simple trusts cannot. Complex trusts may distribute income and simple trusts always have to distribute income.
What are the Corp NOL rules before 2018?
NOL incurred before 2018 has a 2 year carry back and 20 year carry forward
What are the Corp NOL rules after 2017 TCJA?
Incurred after 2017, the NOL is limited to 80% of the taxable income
What are NOL rules for years 2018, 2019, 2020?
Arising in one of these years, the NOL is carried back 5 years and forward indefinitely
What are Corp NOL rules for after 2020?
Forgo carry back and carry forward only
What are the ISO rules ?
No income is recognized at grant date.
When sold it’s sell price less grant price is recognized.
Holding period of 2 years from grant date and 1 year from exercise date. must be met. If not there is ordinary gain of exercise less grant price per share and remaining gain (sell price less exercise) is capital.
