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12 Cards in this Set

  • Front
  • Back
Rule for Gross Income: Must report for tax purposes even if taxpayer may later be required to ______________ the property, funds or equivalent
Return
Tax Benefit Rule: Where taxpayer __________ in one year what they later recover in next
Deducts
Child support is __________ to receiving spouse and ________________ to paying spouse

If payment is reduced by contingency then amount of reduction is considered _____________
Not Taxable

Not Deductible

Child Support
Gross Income ___________ include amounts received by inheritance
Does Not
Tort Awards: Gross income does not include _________ received on account of physical personal injury or sickness but does include ______________

Damages for ___________ alone are taxable
Damages
Punitive Damages
Emotional Distress
Allowed standard deduction for mortgage on principle or secondary residence of up to __________
1 million
Tax Payer has _____________ when funds or property are credited to her account, set apart or otherwise made available do that they may draw upon them
Constructive Receipt
Recipient of Gift takes the ______________
Donor's Basis

This is the Gain Rule
When Property loses value in donor's hands then receipt takes __________ on the date of the gift
FMV
No loss or gain is recognized when taxpayer exchanges a ___________________ property for like kind property
Business or Investment
No gain when loss damaged or stolen property is replaced with _______________ or related property or where damage is converted to money and money is used to buy similar replacement within __________ of involuntary conversion
Similar or Related

2 years
Basis in Inherited Property: FMV of property at date of ____________ or upon executor's election of __________
Death of Decedent

6 months following

so if he paid 10k and its 100k fmv and she sells for 100 while he is alive: 90k taxable, but if he dies and leaves it to her 0 taxable

2010 only has own rule: exec can pay estate tax using inheritance rule or not pay estate tax and use gift rule. if latter heirs are entitled to increase substituted basis up to 1.3 million