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26 Cards in this Set
- Front
- Back
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Adjusted Basis Formula |
Cost at date of acquisition +Capital Additions -Capital Recoveries =Adj Basis |
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Holding period for property acquired by a gift if gain rules apply |
On date donor acquired |
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Holding period for property acquired by a gift if loss rules apply |
On date gifted |
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T/F: Nontaxable exchanges are taxed in the current period |
F |
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Like-Kind Exchange:
1. Definition 2. Qualifications |
1. Property must be same class
2. New property must be received within 45 days of when old property is given up. Whole transaction must be completed within 180 days of when old property is given up, no later than when tax return is due. |
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Sale or Exchange of Principle Residence: 1. Exclusion (S & MFJ) 2. Conditions |
1. S=$250,000, MFJ=$500,000 2. Must have remained principle residence for 2 of last 5 years after sale |
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Capital Asset: 1. Exclusions 2. Definitions |
1. Inventory, receivables, anything used to make a ST profit 2. Anything used to make a LT profit |
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Define: Capital Loss & Requirements Define: Capital Gain |
Capital Loss: Gain from the sale/exchange of a capital asset - requires a sale or exchange Capital Gain: Gain from the sale/exchange of a capital asset |
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Capital Gain Computation Holding Period for Net LT CG |
(Net ST CL + Net ST CG) + (Net LT CL + Net LT CG) 1 year from date of acquisition (i.e. one day after sale) |
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(T/F): The Holding Period for all Inherited Property is Always Considered Long Term. |
T
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Section 1231 Property:
1. Inclusions 2. Exclusions |
1. Income producing livestock, property used in a business, timber, coal, ore, etc.
2. Property held less than one year, inventory and property held for sale, intangibles, a/c rec, and notes rec. |
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Section 1245 Property: 1. Inclusions 2. Exclusions |
1. Livestock, machinery, etc. (all depreciable personal property) 2. Buildings, structural components, etc. |
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Section 1250 Property: 1. Inclusions 2. Exclusions |
1. Buildings, structural components, other leftovers from Section 1245 |
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Permissible Accounting Methods: Name & Define: |
1. Cash: Recognize income when received 2. Accrual: Recognize income when earned 3. Hybrid: A mix of the first two methods |
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3 Part Test Applied to Determine Expense or Capital Expenditure for Accrual Basis Taxpayers: Which Doesn't Fit? 1. All events test satisfied 2. Economic performance test 3. Specific evidence is documented 4. Amounts reasonably determinable |
3
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Methods for Accounting for LT Contracts: List & Define |
Completed Contract Method: Revenue is recognized once job is complete Percentage of completion method: Revenue is recognized as job is completed |
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Tax Formula for Corporations:
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if every duck treaded nocturnally, ducklings try taking crackers together
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Charitable Contributions: 1. Limitation 2. Calculation for limitation |
1. 10% of taxable income 2. Exclude charitable contribution deduction |
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Charitable Contributions of Inventory: 1. Basis 2. Exclusions |
1. FMV 2. Donated to needy parties to achieve organizational mission, dividends received, D-PAD |
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Charitable Contribution 1. Property basis 2. Excess carry-forward |
1. FMV on date of acquisition 2. If limit is exceeded, can carry forward 5 years (no carry-back) |
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Cash Basis to Related Party: When is the deduction recognized? |
When related party counts income |
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Section 248: Define and Discuss |
Organizational expenditures, allows to be amortized over 190 months from date of inception |
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What is the Intent of the Dividends Received Deduction? and how do you decide? |
Minimize excessive double taxation Lesser of 100% of this or last years taxable income |
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Estimated Tax Payments: Requirements |
Must exceed $500 if tax liability does |
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Sam receives a boat as a gift from Dan. Adjusted Basis from Bob = $16,000 FMV at date of gift = $10,000 Sam's basis if he sells for... 1. $17,000? 2. $6,000? 3. $14,000? |
1. Gain of $1,000 2. Loss of $4,000 3. No gain/loss |
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Mike gives Sarah a Diamond Ring. FMV at date of gift = $40,000 Mike's adjusted basis = $45,000 Gift Tax = $10,000 |
=$41,613 |
