Wrong answer Flashcards
Hobby loss
Hobby loss= misc income (if you haven’t pulled a profit 2 of 5 years )
Schedule H
Household Employees
(You employ someone to care for your child or disabled sibling )
Alimony vs Settlement
Take alimony paid - 37,500= recapture
Low income housing loss calculation
Take the amount of loss x marginal tax credit = credit
Reduced SS benefits calculation
PIA- [(# of months early/180)xPIA]
Section 197
Similar to straight line depreciation
Only for Intangibles (goodwill, etc)
179 Deduction
You can expense up to 1,160,000 of qualifying property in year of acquisition
- only 1245 property
- cannot create a loss
What is a Preference Item? (AMT)
IPOD
Intangible drilling cost
PRIVATE activity municipal bond
Oil and gas PERCENTAGE depletion
Depreciation (only ACRS/MACRS) NO STRAIGHTLINE
What is an add back item? AMT
ISO “bargain element”
Property, state, city, income tax
How to you avoid AMT?
Increase Income
Defer paying property, state taxes, deductible medical expenses or charitable gifting
Deferred exercising ISO to a later date or disqualify
Purchase public purpose munis
What is AMT payable?
AMT less Taxes Payable
Boot Calculation
Boot received = recognized gain
Boot paid adds to basis
Basis carries over
Tax Rate of Collectibles
28%
Section 121
Sale of Residence
500k of gain is excluded (MFJ)
250k of gain is excluded (single)
Has to be used as primary residence 2 of 5 most recent years unless for divorce
Don’t have to report at all on taxes
Minimum % benefit for non key employees in a top heavy plan
2% in DB plans
3% in DC plans
