Income Tax - Eta Nonrec Prop Xactions, Other, Adj To $$;

Front 1

What is section 121

Back 1

exclusion of gain on residence up to $250K if 2 years of ownership and use AND lived in property for 2 of 5 years.
Transfers related to divorce are not taxable. FMV at time of divorce is irrelevent factor

Front 2

How is inventory treated in a like kind xchange (sec 1031)

Back 2

Can never be used. Also livestock of different sexes, securities, currency, partnership interests

Front 3

When a buyer assumes a mortgage in an installment purchase, how is the GP calculated

Back 3

Mortgage assumption is subtracted (considered a payment) to develop contract price

Front 4

How do you calculate installment sale income when depreciation has been taken

Back 4

Selling price
Less Adjusted Basis (basis + selling expenses, plus depreciation)
Gross Profit
Divide GP by selling price

Front 5

How long do you have to replace a property in involuntary conversion (sec 1033)

Back 5

Most property 2 years
Real Prop 3 years
Livestock 4 years
Disaster 4-5 years

Front 6

How do you determine if a rental is for profit or not for profit

Back 6

income must exceed expenses for 3 of 5 years.

Front 7

What are new rules regarding materials and supplies costing less than $200

Back 7

Beginning 2014 may be immediately deductible.

Front 8

Are prizes and awards taxable

Back 8

Yes--except for EE awards for safety, service or achievement unless exceed a specific limit

Front 9

What happens to debt cancellation if the tp is insolvent

Back 9

Canceled debt is not taxable Insolvent=debts greater than assets

Also debts discharged in Bankruptcy 11 not taxable

Front 10

How much of debt cancellation from loan modification of principal residence is taxable.

Back 10

A tp may exclude income from loan modification of principal residence (qualified principal residence indebtedness or QPRI, cannot be more than cost plus improvements (extra money taken out for other things not QPRI
Maximum amount of QPRI= $2 million ($1 million MFS)

Must be a decline in the home's value or the tp condition

Front 11

If husband pays mortgage as part of a divorce settlement and wife lives in house, must wife include it as income

Back 11

Yes 1/2 will be considered alimony

Front 12

Are accident settlements taxable

Back 12

No

Front 13

What is the consequences for using HSA for nonmedical

Back 13

20% penalty and income tax

Front 14

What is the max deduction for student loan interest

Back 14

$2.5K. TP may deduct it on behalf of spouse and dependents
Credit card interest does not qualify and tp must be liable for the loan
Interest paid to a family member does not qualify

Front 15

How does one qualify for educator deduction of $250

Back 15

K-12 and 900 hours of work--not for college instructors

Front 16

Can you include cost of moving pets in moving expense

Back 16

Yes. No meals. Expense of buying or selling a home also excluded. ER reimbursements must be reported on W2 as icome

Front 17

If a tp has the option to participate in an ER sponsored helath insurance, how is the SE deduction affected

Back 17

Cannot deduct during period of eligibility

Front 18

What is the penalty for excess contribution on HSA

Back 18

6%. If made by ER must be included in EE's income

Front 19

What is the time test requirement for making moving expenses deductible

Back 19

full time or 39 weeks in first 12 months or

For SE 78 weeks within first 24 months

Front 20

What type of property is excluded from sec 1245

Back 20

Buildings and structural components

Front 21

How is sec 1245 gain treated

Back 21

This is 4 gains on personal (tangible or intangible)Part or all of the gain may will be treated as ordinary income under the rules of depreciation recapture

Front 22

What is sec 1250gain and how is it treated

Back 22

For buildings and structural components
Recapture accelerated depreciation ONLY

Front 23

How is the receipt of a property or assumption of a mortgage treated in in calculating the GP percentage in an installmeent

Back 23

The payment is subtracted before calculating the GP percentage (except to the extent that it exceeds the adjusted basis)
Any depreciation recapture is recognized in year of sale.

Front 24

Whjat are the requirements of a like kind exchange

Back 24

Nonrecog of gain if held for investment or productive use AND NOT inventory AND xchange for two or more assets NOT cash

Front 25

Do water or mineral rights, oil and gas interest, copyrights, ttademarks and other intangibles qualify for 1031

Back 25

Yes as long as it is not a security or partnership interest

Front 26

What is the double basis rule on sale of gifted proerty

Back 26

If FMV at date of gift is less than donors basis, the donee's basis for gain is the transferred basis. However, if the donee reports a loss on the sale of gifted property, basis is the lower of the transferred basis or the FMV of the property at date of gift.

Front 27

If FMV at date of gift is less than donors basis and donee sells property for a price higher than both the FMV at DOG and donor's basis, what is the basis used in calculating the donee's gain

Back 27

FMV

Front 28

If FMV at date of gift is less than donors basis and donee sells gift at a cost between donor's basis and DOG FMV, how is the gain/loss calculated

Back 28

There is none

Front 29

When can you use a sec 121

Back 29

only on main home--not vacation or rental
Must meet ownership and use tests(2 of 5 years b4 sale)
cannot have excluded gain within 2 years

Front 30

What are the related party rules

Back 30

If a loss, not deductible. If loss is not recognized and subsequently sold to nonrelated party, then gain is recognized only to the extent that it exceeds the disallowed loss.
Related=relatives or 0% interest