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116 Cards in this Set
- Front
- Back
do you get an extra exemption for being blind? Y/N
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N
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What is child care credit amount?
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limited to $3000 for 1 child
up to $6000 for 2 kids |
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What is best source for info for the intent of a recent tax law change?
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Congressional Committee Reports
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Is sick pay taxable? Y/N
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Y
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What is income threshold to claim parent as dependent?
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< $3500
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Margin interest is only deductible up to the amount of _____ income
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investment
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Figure self employment tax
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.9235 x 15.3%
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Add add'l ____ of std deduction for child with unearned income
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$300
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for large income earners, by what amount can std deduction be reduced?
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1% of AGI or 80% otherwise allowable
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If company elects FIFO how will inventory be reflected on balance sheet?
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reflect current cost
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Can sole proprietors carry back losses? NOL? Y/N
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Y
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Using FIFO, how will inventory reflect on balance sheet?
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reflect curent cost
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Which type of biz can't use NOL?
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S corp
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Add ___ to std deduction with child with unearned income
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$300
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Margin interest is deductible only up to amount of ______ income.
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investment
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For large income earners by what amount can their deductions be reduced?
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1% of AGI or 80% otherwise allowable
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PSCs pay a ___ rate. PHC pays a ___ rate
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35%
15% |
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A revocable living trust is a conduit (tax neutral) trust. T/F
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T
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If trust income is used to satisgy a grantor's legal support obligation, the trust income will be taxed to the _____
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grantor
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Straight line depreciation rates
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5 year 10%
7 year 7.14% |
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MACRS depreciation rates
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5 year 7 year
1 20% 14.29% 2 32% 24.49% |
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____ property quals under Sections 179
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1245
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In like kind exchange use 3 #s
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FMV of property rec
Adj basis of property given up Boot |
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The recognized gain is the lesser of the _____or the _____
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boot
gain realized |
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NOL can carry back back losses for ___ years and carry forward loseses for ____
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2
20 |
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Entity (corp owned) purchase life insurance may affect corporate AMT. T/F
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T
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Increasing taxable income, Selling home/renting, paying off existing mortgage all reduce AMT. T/F
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T
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unused passive losses from a non-publically traded limited partnership can be used against a master limited partnership (public). T/F
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F
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Divorce decree gives payor spouse and kids rent free occupancy of the family home. Qual alimony payment? Y/N
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N
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For alimony recapture, add 1st and 2nd year...then subtract ____
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37,500
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Do I bonds produce phantom income?
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No, inflation and fixed income are tax deferred until redemption or maturity.
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Short term max deduction is ___ of AGI. Long term max deduction is ___ of AGI.
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50%
30% |
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If you are donating loss property, you can deduct up to _____.
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FMV
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The limit that a corp can contribute to a 50% public charity is _____ of taxable income.
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10%
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You must add gambling winnings to get to AGI T/F
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T - you can subtract gambling losses from winnings
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The exclusion for EE bonds begins to phase out at an AGI of approximately _____ for joint filers for 2009
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$105,000
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There is no deduction allowed for interest paid or accrued on debt incurred to purchase tax-exempt securities. T/F
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T
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Kiddie tax applies to earned/unearned income above ____
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unearned
$1900 |
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____of the dividends received from a qualifying corporation may be excluded if the recipient corporation owns 20% or less of the distributing corporation; ____ exclusion if over 20% to 80% ownership; ____ exclusion if over 80% ownership
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70%
80% 100% |
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If a renter provides repairs to a landlord..must you incl that in income received? Y/N
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Y
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The Section 1231 lookback rule only applies if there are current year net Section 1231 ____and unrecaptured Section 1231 _____during the 5-year lookback period.
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gains
losses |
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The Section 1245 cost recovery recapture is the lesser of the cost recovery deductions taken or the gain realized. T/F
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T
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The negligence penalty is ____of the deficiency due to the taxpayer's negligence
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20%
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If a corporation owns the annuity contract, the earnings are not tax-deferred. T/F
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T
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If you borrow interest from a life insurance policy (whole life) do you have do report it as income? Y/N
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Y
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The penalty for failing to file an income tax return is ___ of the amount due for each month, or part thereof, that the return is late, up to a maximum penalty of ____
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5%
25% |
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The general partnership business form does not require registration with the state. T/F
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T
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Is the property tax deduction incl in computing the AMT? Y/N
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N
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EE Bond Interest phaseouts
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69,950 - 84,950 S
104,900 - 134,900 MFJ |
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For 2009, the maximum expense election is ______
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133,000
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Interest on a home equity loan up to _____of principal is generally deductible
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100K
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Corp Divs are taxed at ____ tax rate.
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15%
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Husband and wife in an S corp are treated as ____ shareholder(s).
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one
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SE Tax Calc
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Multiply by .1413 if under 106,800
1.Sub 1/2 SE tax 2. 106,800 x 15.3% 3. Excess of 106,800 x 2.9% |
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The Section 1245 cost recovery recapture is the lesser of the cost recovery deductions taken or the gain realized. T/F
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T
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to figure accumluated earnings tax
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Taxable Income
- Fed Income Tax - Dividends - Accumulated earnings credit Subtotal X 15% |
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Gambling losses are only deductible to the extent of gambling _____
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winnings
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AGI Phaseout ___% over ____
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3% over 166,800
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To get to taxable income remember to subtract _____ in exemptions!
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$3650
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Embezzlment income is included in taxable income. T/F
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T
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Kiddie tax applies to kids who get ____ income and are under age ___ or a full time student and under age ____
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unearned
19 24 |
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Income tax negligence is ____
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20%
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If a corporation owns the annuity contract, the earnings are not tax-deferred. T/F
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T
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The penalty for failing to file an income tax return is ___ of the amount due for each month, or part thereof, that the return is late, up to a maximum penalty of ____
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5%
25% |
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Is a Gen Partnership a "statutory entity?" Y/N (chartered by the state)
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N
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The compensation for lost wages and the punitive damages are both included in income (not negligence damages). T/F
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T
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If the FMV on the date of gift is greater than the donor's adjusted basis, use the donor's adjusted basis. T
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T
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Basis for a partnership is cash plus partnership debt. Basis for a corporation is only up to cash contributed, not debt
even if personally endorsed. T/F |
T
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S corp can use NOLs..T/F
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F
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How long can an excess charitable contributions be carried forward to future years?
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5 years or death if sooner
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Collectibles are taxed at
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28%
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if you have a ST loss and a LT loss you use ___ loss first (can't add)
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ST
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A CODA is a ____ plan
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401(k)
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1245 gain is ___
1231 gain is |
ordinary income
capital gain |
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Wash sales occur when a taxpayer disposes of securities at a loss and acquires identical securities within ____ BEFORE or AFTER day of sale
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30 days
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for home sale exclusion on a job or health issue..you prorate the exclusion based on 5 year rule Y/N
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Y
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if unmarried partner has time in home prior to sale of home..does that count for exclusion for home sale?
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Y
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Sec 267, 1244 and wash sales apply to ____ only
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losses
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under sec 1244, a single taxpayer can deduct up to ___ and ___ for MFJ
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50K
100K |
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in like kind exchange...debt relief is treated as
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boot
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Section 1033 is
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deferral of gain on condemnation of property, destruction, theft etc
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for section 1033 use ___ year end
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fiscal
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Gain must be recognized for exchange of annuity for life policy Y/N
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Y
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1040 Personal income tax exemption
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3650
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is worker's comp incl in gross income? Y/N?
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N
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are scholarships for room and board incl in gross income? Y/N
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Y
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alimony recapture (only first 3 years of alimony)
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P1+P2- 2P3 - 37,500
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tax planning opp...front load alimony payments in year 1 and 2 when taxpayer is in higher tax bracket Y/N
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Y
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5 year carry forward on excess charitable contributions Y/N
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Y
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Casualty loss is lesser of
Then back out $100 Then back out 10% of AGI |
decline of FMV or adj tax basis
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Are medical co pays and deductibles deductible on Schedule A Y/N
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Y
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Not subj to 2% misc
IGA |
IRD
Gambling losses Annuity losses for decedent annuitant |
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Child tax credit is ____ for child under ___
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$1000/17
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Child tax credit phaseout
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Single 75K
MFJ 110K |
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Dependent care credit is ___ expenses paid for qual expenses for child under ___. The lesser of $3000 or actual expenses. 20% of $6000 max
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20% of expenses paid
13 |
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Utilizing Dependent Care Expense Account usually will provide greater tax savings T/F
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T
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Kiddie tax applies to kids under age 19 with living parent or under age 24 and a full time student. Unearned income in excess of ___ Then a parent's marginal tax rate
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1900
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std deduction for dependent ..greater than ___ or earned income plus ____
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950
300 |
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Rental use property is greater than 14 days...used personally less than the greater of ___ of rental days or ___ days
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10%
14 |
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Failure to pay penalty is ___ up to ___
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5%
25% |
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A CFP can/not represent a client at an IRS audit
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can not
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which organization never pays Federal tax
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partnership
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Section 179 max
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134,000
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5 tests of dependency exemption test
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gross income, support, member of household or family, citizenship or residence, and joint return
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If as part of an academic scholarship a student receives $ for room and board..is this taxable income? Y/N
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Y
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Are prizes and awards fully taxable as income? Y/N
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Y
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Are punitive damages incl in taxable income Y/N
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Y
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What is the inclusion amount re: leased vehicles?
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The inclusion amount is designed to help to even out the lease expense vs. depreciation expense
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What is the min deductible for a family with a high ded health policy?
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2400 (1200 single)
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Def of Substitute Basis
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The substitute basis is the asset’s fair market value reduced by the gain realized but not recognized
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Cost recovery of an intangible asset is accomplished through
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amortization
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The standard deduction for a dependent is the greater of ___ or $____ but not exceeding the normal standard deduction of ___
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$950 or $300 plus earned inc but not exceeding $5700
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For purposes of tax deductibility what is the minimum deductible that a family can have on a high deductible health policy in the current year?
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2400
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Computers use ___ for depreciation. Autos use ___
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5 years
5 years |
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Purpose of depreciation recapture
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when an asset is sold the taxpayer receives his capital back tax free
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Any sale amount in excess of the original purchase price of a 1245 asset is _____
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1231 gain
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