This is quite taxing

Question 1

what happens with the Alternative minimum tax

Answer 1

must pay the greater of the regular tax or the tentative minimum tax

Question 2

what is the AMT credit

Answer 2

is limited to the amount of AMT generated from timing differences, and this credit is available in a year in which tentative tax is less than regular tax.

Question 3

How long can the AMT credit be carried forward

Answer 3

indefinitely

Question 4

how do you compute AMT

Answer 4

excess of the alternative minimum tax over the regular tax

Question 5

American Opportunity

Answer 5

enrolled in first 4 years of college. $2k credit for tuition and fees and books. 2nd $2k you get a 25% credit

Question 6

Lifetime learning

Answer 6

Available after the American Opp credit. $2k per taxpayer (not per student)

Question 7

what kind of credits can result in a refund even if the TP didnt have any income tax liability

Answer 7

Earned income credit

Question 8

what is the credit percentage of AGI for the child care credit?

Answer 8

35% if the AGI is under $15k and is reducted by 1% for each $2k increment that AGI is above $15k. Once AGI hits $43k the % is reducted to 20%

Question 9

at what AGI does the american opp credit start to phase out?

Answer 9

$160k

Question 10

how much is the credit for the child credit

Answer 10

1000 per child. reduced by $50 for every $1k over $110k salary

Question 11

what are the requirements to be a qualifying child for the child credit?

Answer 11

under 17 and dependent

Question 12

what are the requirements for the dependent care credit

Answer 12

under 13

Question 13

what amount of qualifying expenses are allowed for the dependent care credit

Answer 13

$3k for one qualifying individual and $6k for more than one (limited to amount paid and wages of lowest paid spouse)

Question 14

what is the work opportunity credit calc on?

Answer 14

on the amount of wages paid per eligible EE during the first year of employment. Max credit is $2,400 per EE

Question 15

definition of a private foundation

Answer 15

tax exempt org that receives less than 1/3 of its annual support from its members and the general public

Question 16

if boot is received, what is the gain recognized to the SH?

Answer 16

the lower of: realized gain or FMV of the boot received

Question 17

what is the calc of gain recognized if liabilites are assumed?

Answer 17

Gain recognized = liabilities assumed - adj basis of property transferred

Question 18

how can you be eligible to defer a gain on the contribution of appreciated property to a corp?

Answer 18

the SH must receive stock in exchange for the property.

Question 19

immediately after incorporation, what percent of stock must the incorporator own to be a tax-free incorporation

Answer 19

80%

Question 20

what basis does a corp have when property is donated by a SH?

Answer 20

the same basis that the SH had in the items + gain received by SH

Question 21

is there gain or loss recognized if property is transferred soley for the exchange of stock of the corp

Answer 21

if immediately after the transfer the transferring TP have control over the corp (80%). if combined, the SH own more than 80%, its tax free

Question 22

No gain or loss is recognized to the SH or corp upon the formation of a corp if:

Answer 22

• the SH contributing property own collectively at least 80% of the voting stock
• the SH contributes property not services to the corp
• the SH receives only stock in exchange

Question 23

How do you compute the SH’s basis in the stock in a corp formation?

Answer 23

Basis of all property transferred to the corp
\+Gain realized by the SH
- boot received by SH
-Liabilities assumed by the corp
=SH basis in stock received

Question 24

how long is the Holding period

Answer 24

the length of time the SH held the item before transferring to corp

Question 25

how long can a net capital loss be carried forward or back

Answer 25

back 3 years and forward 5 years

Question 26

if a C corp owns less than 20% of a domestic corp, what % of dividends received or accrued may be deducted?

Answer 26

70%.
A C corporation owning 20 percent or more but less than 80 percent of a domestic corporation may deduct 80 percent of the dividends received or accrued from the corporation. Similarly, C corporation owning 80 percent or more of a domestic corporation may deduct 100 percent of the dividends received or accrued from the corporation

Question 27

How long can you carry back or forward a NOL?

Answer 27

back 2, forward 20

Question 28

for corporations, what is the limit on the deduction for charitable contributions?

Answer 28

limited to 10% of taxable income

Question 29

for corp, excess chartiable contributions is carried back forward..

Answer 29

carried forward for 5 years

Question 30

the domestic production deduction may not exceed what percent of the wages allocable to domestic production income

Answer 30

50%

Question 31

if a corp owns less than 20% (stock) of the domestic corp that paid the dividends, what percent dividend received deduction may they take

Answer 31

70%

Question 32

What cannot be amortized for tax purposes?

Answer 32

stock issuance costs

Question 33

how do you compute alternative minimum taxable income for corp

Answer 33

corp may take an exemption of $40k minus 25% of AMTI exceeding $150k

Question 34

for purposes of the personal holding company tax,

Answer 34

taxable income is reduced by excess charitable contributions to calc personal holding company income

Question 35

who is exempt from the personal holding company tax

Answer 35

banks, insurance companies, finance companies

Question 36

who is subject to the personal holding company tax

Answer 36

personal holding companies

Question 37

in order to be a personal holding company, a companys passive income must be __ of AGI

Answer 37

60% or more

Question 38

what is a consent dividend used for

Answer 38

reduce both the accumulated earnings tax and the personal holding company tax

Question 39

for purposes of the PHC tax, how do dividend distributions from earnings and profit paid within 2.5 months of year end affect PHCI

Answer 39

reduce PHCI

Question 40

what does PHC income consist of

Answer 40

dividends; interest; annuities; rents; mineral, oil and gas royalties; copyright and patent royalties; produced film rents; compensation for more than 25 percent use of corporate property by shareholders; amounts received under personal services contracts; and amounts received from estates and trusts

Question 41

what is the accumulated earnings tax

Answer 41

a penalty tax imposed on corporations that accumulates earnings and profits for the purpose of avoiding income tax for its shareholders. The accumulated earnings tax is equivalent to 20 percent of the corporation’s accumulated taxable income.

Question 42

Accumulated taxable income is composed of

Answer 42

taxable income adjusted downward for federal income and excess profits taxes, charitable deduction in excess of the ceiling, net capital gains and losses, and taxes of foreign countries and U.S. possessions and upward for certain corporate deductions, net operating loss deduction and capital loss carryback or carryover.

Question 43

The stock ownership test is satisfied if, at some time during the corporation’s tax year,

Answer 43

50 percent or more of the corporation’s stock was directly or indirectly owned by five or fewer individuals.

Question 44

In order to have a brother-sister controlled group of corporations

Answer 44

five or fewer common shareholders must own in aggregate 80% or more of the stock of each corporation within the group.

Question 45

A parent-subsidiary affiliated group can only exist when

Answer 45

one corporation owns 80% or more of the stock of at least one corporation.

Question 46

The primary advantages of filing a consolidated return are that

Answer 46

1) losses of one affiliated member offset gains of another member;
2) intercompany dividends are excludable from taxable income; and
3) intercompany profits are deferred until realized.

Question 47

“Buy-sell” agreements are excludable from a decedent’s estate provided the agreement

Answer 47

1) is a bona fide business agreement;
2) is not a device to transfer property to the decedents family for less than full and adequate consideration; and
3) has terms similar to those entered into by persons in arm’s length transactions.

Question 48

when is the due date of the estate return

Answer 48

9 months after death

Question 49

Certain credits may be offset against the gross estate tax to determine the net estate tax of a U.S. citizen.

Answer 49

These credits are the unified credit, foreign death taxes, prior transfers and gift taxes paid on pre-1977 gifts.