Passkeys Flashcards
Charitable Deduction
Individuals
Overall limit = 50% AGI (individuals)
1) Cash - may be all 50%
2) General property - lesser of basis or FMV
3) Short-Term property - basis
4) Long-Term appreciated property FMV limited to the lesser of:
a)30% of AGI
b)The remaining amount to reach 50% after cash contributions
Only excess of contribution over consideration aka cost of the dinner.
When performing svcs only deduct out-of-pocket expenses (14 cents p/mile). Time may not be deducted
Carryover - 5 years
Contributions over $500 non cash - file form 8283. If over $5,000 for any one item - need appraisal
Corporation Overall limit = 10% Taxable Income (Corporations) Taxable Income is calculated before: > any charitable contribution > any Dividends Received Deduction > any Net Operating Losses carryback > any Capital Loss carryback > any U.S. production activities deduction
Casualty and Theft losses
Non-business casualty loss R2-26 10% AGI Limitation The loss is FMV immediate before the casualty minus FMV afterwards. However loss may not exceed the adjusted basis of the property. Whichever amount is used must be reduced by insurance recovery. Casualty must be sudden or unexpected. Ex. of not allowable casualties > damage caused by trees by Dutch elm disease > Lost, misplaced, or broken property Required: Insurance claim filing and coverage by insurance Formula: Smaller loss of 1. lost cost/adj basis or 2. decreased FMV = taxpayer's loss
= Eligible Loss
= deductible loss
Business lCasualty losses R3-17 100% deductible If partially destroyed: Lesser of: 1. Decline in value of the property, or 2. Adjusted basis of the property immediately before the casualty
Fully destroyed = NBV
Adjustments for AGI - Above the line
Deductions to arrive @ AGI
Educator Expenses (250 p/taxpayer)
Student Loan Interest Expenses (not principal)
Tuition & Fee deduction ($4,000 in 2015)
Health Savings Account ($3,350/$6,650 in 2015)
Moving Expenses - work required 50 miles 39week stay
1/2 Self-Employement - FICA - Not deducted on Sch. C
Self-Employment Health Ins. - Not deducted on Sch. C
Self-Employment Retirement - Not deducted on Sch C
Interest Withdrawal Penalty
Alimony paid
Attorney fees paid - whittle-blower
Domestic Production Activities
Additional Deduction for Elderly/blind
1 qualified
65 or blind - $1,550/$1,250
65 and blind - $3,100/$2,500
2 qualified
Each 65 or blind - $2,500
Both 65 and blind - $5,000
Hobbies/Activities not engaged for profit
A deduction equal to the amount of the deductions that would be allowed if such activity were engaged in for profit, but only to the extent that the gross income derived from the activity exceeds allowable deductions. No losses allowed
Interest and taxes ok
An activity is engaged for profit if shows profit for 3 out of 5 years
Breeding, training, showing, racing horses 2 out of 7 years
Corporation Transfers
No tax = NBV
Gain realized by Shareholder = FMV - Property basis
Gain recognized by Shareholder = If there is boot received
- cash or excess liability assumed
(Liability assumed are not considered boot for determining gain, unless liability exceeds the basis of all property contributed Basis) of shares = Transferor Basis + gain (if any)
Liability assumed are considered boot for purposes of determining the adjusted basis of the stock to shareholder
Shareholder basis = NBV + cash contributed to corp
Corporation Basis = Shareholder Basis + gain
Are dividends for mutual funds that lists its source 100% various European companies included in individual income?
Yes. It is included in taxable income. However, note the taxpayer may be entitled to a credit or a deduction (at the taxpayer’s option) for the taxpayer’s share of any foreign income tax paid by the mutual fund.
How do you calculate the self-employment Tax?
It is the net earnings from self-employment X .153 (15.3%)
What is the net earnings from self-employment?
It is the total amount of self-employment income X .9235 (92.35% or 100% - 7.65%)
What is the adjustment for self-employment tax paid?
It is 50% of the self-employment tax.
Forms and Schedules
Personal - 1040 or 1040 Itemized Deductions - Schedule A Interest Income Schedule B Business P&L - Schedule C Self-Employment - Schedule SE Farming - Schedule F Rental - Schedule E AMT - Form 6251 Capital Gains and losses - - Schedule D
Exempt Organization - 990 990EZ receipts >501(c)(1) - Congress >>501(c)(2) - holding title?? >>501(c)(3) - religious, amateur sports >>509 - Private foundations Form 990-PF
Corporation - 1120
Dividends & Special Deductions - Schedule C
Schedule D - Gains and losses
Schedule J - Tax Computation
Schedule K - Other Information
Schedule L - Balance Sheet
Schedule M1 - Recon of Income/Loss p/books w/Income p/Return
Schedule M2 - Analysis of Unappropriated RE per books
Schedule M3 - Net Income/loss Reconciliation for Corporations with total assets of $10 mil or more.
Form 8949 Sales and other disposition of assets
Form 8824 Like-kind-exchanges
Partnerships - 1065
S Corp pass Income/losses - K-1
Separate Items on K-1 for Partnerships and S corps.
- Ordinary Income (not subject to FICA) which includes recapture income and unearned revenue not related to rental and mark-to market
- Rental income/loss, which includes recapture income an unearned revenue related to rental activities
- Portfolio (interest, dividends, royalties, Capital Gains/losses)
- Tax-exempt Income
- % depletion
- Foreign Income Tax
- Section 1231 gains and losses
- Charitable contributions
- Expense deduction for recovery property (Section 179)
- Unrecaptured Section 1250 Income
- Gain (loss) from sale of collectibles
To or from AGI
Above the line > To AGI > To arrive @ AGI > For AGI Below the line > From AGI > After AGI
Above the line
Educator Expenses $250/$500 IRA Student Loan Interest Tuition and Fee deduction Health Savings Account One-half Self employment FICA Self-employment health insurance Self-employment retirement Interest withdraw penalty Alimony paid Attorney's fees whistle-blower Domestic production activity deduction
Filing day
> Individual - Calendar Year - April 15
C Corporation - Calendar or Fiscal 15th day of 3rd month
S Corporation
Calendar year only - March 15
Partnership -
Calendar Year - 15th day of 4th month (April/15) or Fiscal Year - up to 3 month deferral - 15th day of the 4th month
