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48 Cards in this Set
- Front
- Back
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INDVL TAX
LIFE INSURANCE PREMIUMS PAID BY INDVL (NOT EMPLOYER) |
personal expense, t/4 ND
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INDVL TAX
LIFE INSURANCE PROCEEDS - from death of husband or parent |
not taxable
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INDVL TAX
LOSS SUSTAINED FROM NON-BUSINESS BAD DEBT |
always classified as short term capital loss - Sch D Cap Gains and Losses
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INDVL TAX
LOSS FROM SALE OF 1244 STOCK (SMALL BUSINESS CORP) |
generally deductible as ORDINARY LOSS, up to 50,000/100,000 s/mfj - Sch 4797 - sale of business property
if exceeds 50,000/100,000 then remaining is dedutible as CAPITAL LOSS on Sch D -if sold as a gain, then capital gain, Sch D |
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INDVL TAX
CPA REVIEW COURSE |
-does education expense qualify for a new profession, trade or business?
if it does, then ND |
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INDVL TAX
CASUALTY LOSS |
Sch A - Item Ded
-subj to $100 threshhold -10% of AGI |
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INDVL TAX
STATE INHERITANCE TAX |
ND
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INDVL TAX
HOME MORTGAGE INTEREST |
-Sec 163(h)(3)(b) limits interest deduction to 1st home 1,000,000
-Sec 163(h)(3)(c) allows up to 100,000 on home equity |
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INDVL TAX
INTEREST INCOME ON GENERAL STATE & LOCAL GOVMT BONDS |
NOT TAXABLE
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INDVL TAX
INTEREST ON REFUND FROM FED TAXES |
TAXABLE - SCH B Interest Income
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INDVL TAX
JURY DUTY PAY |
Taxable - Other Income for AGI
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INDVL TAX
DIVIDENDS RECVD FROM MUTUAL FUND IN TAX FREE GOVMT OBLIGATIONS |
not taxable
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INDVL TAX
SUBSCRIPTIONS FOR INVESTMENT PUBLICATIONS |
Sch A - Other Ded subj to 2% AGI
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INDVL TAX
Interest expense from home equity line to use in Business |
Sch C - fully deductible
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INDVL TAX
interest paid from home equity loan for vacation home |
fully deductible - Sch A
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INVDL TAX
Charitable Contribution C/O 2008 & No Charitable Contribution for 2009 |
Sch A - Item Ded - subj to 50% of AGI
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INDVL TAX
Homeowner's Insurance Premium on principle residence |
ND
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INDVL TAX
Babysitter/Child care - unrelated |
Credit is allowable
-For 2008, 20-35% of qualified employment related expenses -limited to $3000 x 20%= $600 -tax liability will be reduced by $600 |
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INDVL TAX
DEPENDENT - DEFINITION |
-any person who qualifies as a dependent exemption except that
-gross income & joint return tests are not met -med expenses of mother who is not a dependent b/c has gross income is Sch A item ded no subj to 2% |
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INDVL TAX
SALES TAX |
12/31/2003-1/1/2009
-can elect to deduct Sales Tax in lieu of state and local income taxes -actual paid (receipts) or irs tables -can be for car and boats -not subj to 2% floor |
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INDVL TAX
Legal fees paid to atty to prepare a will |
personal legal expense - ND
legal counsel regarding tax matters or incurred during production of income are deductible |
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INDVL TAX
$50,000 CASH GIFT RECVD FROM AUNT |
Not Included in Gross Income
Not taxable |
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INDVL TAX
IRA CONTRIBUTION |
-no phaseout based on AGI if you didn't participate in an employer qualified pension plan
2008- lesser of 100% of contribution or 6000 |
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INDVL TAX
FEDERAL TAX REFUND |
Not included in Gross Income
Not Taxable |
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INDVL TAX
EMPLOYER PAYS 100% of GROUP TERM LIFE INSURANCE |
1ST 50,000 OF COVERAGE CAN BE EXCLUDED FROM EMPLOYEE'S GROSS INCOME, the rest has to be included
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INDVL TAX
SALE OF PRIMARY RESIDENCE |
-bought home for 50,000
sold for 400,000 -up to 250,000/500,000 S/MFJ of gain can be excluded from gross income of a principle residence |
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INDVL TAX
Stock dividend received |
0 tax effect
no cash distribution did not sell it so no capital gain or loss |
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INDVL TAX
DEPENDENCY EXEMPTION |
C -must be US citizen, canada, or mexico
I - income limited to 3,300/3400-(2007) -unless child is under 19yrs old or -full time student under 24 yrs old R - relationship, must be lineal descent, does not include cousin -met if dependent lives with you entire year S - Support - over 50% -includes tax exempt items like Social Sec, AFDC, scholarships not include -multiple support agreement -if more than 1 person pays > 50%, can give exemption to any person who paid at least 10% J - No join return with spouse |
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DEPENDENCY
QUALIFYING CHILD DEFINITION |
under 2004 tax reform act
-eliminates the gross income and support tests if the dependent is the taxpayer's qualifying child |
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AMT FOR INDVLS
What itemized deductions are deductible for AMT? |
NOT DEDUCTIBLE FOR AMT - must add back:
-personal, state & local inc tax -misc item ded subj to 2% -home mortgage interest |
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AMT ADJUSTMENTS FOR INDVL
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SIMPLE - ADJUSTMENTS TO REG TAX INCOME
S- standard deduction +add back I - Interest on home equity loans unless to buy, build, or improve main home - add back Interest on acquisition indebtness & investments can be claimed M-edical exp under 10% AGI P -ersonal & dependent exemptions +add back L - ocal & state inc tax - ND E-mployee bus expense, tax prep, investmt exp subj to 2% ND, but other misc ded subj to 2% are still allowed |
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AMT PREFERENCES FOR INDVL
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PIE - Adj to reg Tax Inc
P-rivate activity bond interest -Fully taxable I-ncentive Stock Options - taxed when exercised E-xcess depr on personal property- over 150% declining bal when Dbl declining balance was used for reg tax |
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ACE ADJUSTMENTS FOR INDVLS?
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No, only for CORPs
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AMT Formula for INDVL
-denies certain deductions and benefits in regular taxable income -for people who benefit from large itemized deductions or special tax benefits |
Regular Taxable Income
+/- Adjustments & Preferences (SIMPLE PIE) = AMTI before exemption -Exemption = AMTI x Tax rate = Tentative Min Tax -Regular Tax = AMT |
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INDVL TAX
CHARITABLE CONTRIBUTIONS CARRYOVER RULES |
carryback - no
carryforward - 5 years |
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NOL for INDVL CARRYOVER RULES
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carryback - 2 years
carryforward - 20 years |
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CARRYOVER RULES
Net Capital Losses for INDVL Net Capital Losses for CORP |
carryback - 3 years
carryforward - indefinitely CORP - 0 NET CAPITAL LOSS |
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CARRYOVER RULES
INVESTMENT INTEREST |
carryback - no
carryforward - indefinitely |
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CARRYOVER RULES
NET PASSIVE LOSSES |
carryback - no
carryforward - indefinitely, may be claimed when investment is sold |
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PREMIUMS ON GROUP TERM LIFE INSURANCE
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over 50,000 - taxable - earned income
less than 50,000 - not taxable |
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INDVL NET CAPITAL LOSS
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-up to 3,000 against ordinary income
-unused gets carry forward indefinitely |
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STATUTE OF LIMITATIONS IRS HAS TO FILE NOTICE OF DEFICIENCY
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later of 3 years from
-when the return is due (incld exts) -when it was actually filed |
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STATUE OF LIMITATIONS -
FRAUDULENT RETURNS |
none
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STATUTE OF LIMITATIONS -
IRS asserts an understatement of gross income > 25% of gross income reported |
6 years
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STATUTE OF LIMITATIONS -
TO CLAIM A REFUND |
-must file 1040X
later of -3 years after tr was due (incl exts) -2 years after payment of tax |
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FOR AGI ADJUSTMENTS
(FACE OF 1040) ABOVE THE LINE |
I nterest on Student Loans- < 2500
E mployment Tax -50% M oving Exp- MedicalInsPrem100% B usiness Exp (Sch C) +/- R ent, Royalty, Flow Thru +/- A limony (CANNOT) - C ontrib to Retirement - (IRAS, Keough, SIMPLE, SEPs) E arly Withdrawal Penalty - Duty - Jury Income + Education - 4000 Health Savings Acct - ltd amts Farm Income A C E D EDUCATION HEALTH SAVINGS FARM |
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Item Ded from AGI - SCH A
COMMIT |
Charitable Contributions
Other Misc Exp not subj to 2% Misc Exp subj to 2% Medical Exp (exceeds 7.5% of AGI) Interest Paid -investment, mortgage loan, home equity loan Taxes Thefts & Casualty Losses |
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Sch A Item Ded Phaseout
for high AGI indvls |
lesser of:
3% of AGI over threshhold 80% of certain item. ded (not incldg- -gambling loss, med exp, invest interest, casualty- GMIC |
