REG mod 35f

Question 1

Name significant AMTI Adjustments.

Answer 1

Depreciation on certain real and personal property
Medical: deduction floor is raised to 10% of AGI
Mortgage Interest: only allowed if the loan proceeds were used to buy build or improve the home
Not allowed: Taxes & Misc Deductions, Personal Exemption, Standard Deduction

Question 2

What is the maximum amount of qualified student loan interest that may be deductible?

Answer 2

$2500

Question 3

Which schedule should an individual taxpayer use to deduct foreign income taxes?

Answer 3

Schedule A

Question 4

What is the overall limitation of cash contribution deductions?

Answer 4

50% of Adjusted Gross Income

Question 5

What determines if the gain / loss on the sale of a capital asset is long term or short term?

Answer 5

The holding period. If the taxpayer held the capital asset for more than one year, the holding period is considered to be long-term. If the capital asset is held for less than one year, the holding period is considered to be short-term.

Question 6

Property taxes, imposed by a state or local taxing authority are deductible on Form 1040 by a taxpayer. True / False

Answer 6

True. Real property taxes may be deducted for federal taxes.

Question 7

Name the deductions that are subject to the 2% of AGI limitation.

Answer 7

Unreimbursed employee expenses
Tax return preparation fees
Investment Advisor fees
Safe-deposit box
Legal fees to collect alimony

Question 8

What is the Generation Skipping Tax rate?

Answer 8

35% - this is a flat rate.

Question 9

Name some taxes that are not deductible on for federal tax purposes.

Answer 9

Federal income taxes, gift taxes, estate taxes, social security taxes

Question 10

What determines if income is passive or active?

Answer 10

This is determined by considering if the person materially participates in the activity.

Question 11

When is an estate tax return required to be filed?

Answer 11

An estate tax return must be filed within nine months of the date of death. Note: this can be extended by the IRS.

Question 12

What type of income is dividend income?

Answer 12

Portfolio income Note: This is not passive income

Question 13

What is required to use the filing status Qualifying Widower?

Answer 13

A dependent child and a deceased spouse

Question 14

Is the percentage of completion method of revenue recognition acceptable under the IRC?

Answer 14

Yes, an entity may report revenue on the percentage of completion method.

Question 15

Are the FUTA payments made by an employee tax deductible?

Answer 15

No