R2 & R3

Question 1

What is the MAX amount one can deduct for contributions to her Keogh plan?

Answer 1

Self Employment earnings before Keogh * 20%

SEEBK=(NI-1/2*SETax)

Question 2

SEC 179, (to be fully expensed).

Answer 2

1) Tangible Personal Property
2) bought from an unrelated Party
3) Going to be used in trade or business

Question 3

How to calculate Casualty loss

Answer 3

1) (lesser of Adjusted basis or loss of value)-100(per casualty) - 10%*AGI

side note, no deduction for something avoidable.

Question 4

Charity subject to the 50% limit is carrid forward? carried back?

Answer 4

only carried forward 5 years.

Question 5

Are medical expenses payed in the current year for a procedure last year deductable in the current year?

Answer 5

yes!

Question 6

What are capital Assets

Answer 6

not used in trade or business.

Question 7

If the executor wants to ecercise the “ALternate Valuation date” and none of the property is distributed, the assets must be valued as of how many months after the decedents death?

Answer 7

6 months or the earlier of sale or distribution.

Question 8

When is one required to pay atleast 110% of last years tax Liability?

Answer 8

When there AGI is > $150,000!

Question 9

How to calculate “Kiddie Tax?”

1) What is taxable at the parents highest rate?
2) What is taxable at the minor’s rate?

Answer 9

Total interest income - standard deduction = x

1) Parents includible income = x - standard deduction
2) standard deduction

Question 10

How to Calculate ATM…

Answer 10

Included in AMT:
medical expenses
home mortgage interest
charity

excluded from AMT (a lot, only listing a few):
taxes (state & RE)
miscellaneous itemized…

Question 11

which credits are refundable

Answer 11

• Child tax credit (refundis limited)
• Earned income credit
• withholding taxes (w-2)
• Excess social security paid
• american opportunity credit (40% refundable)

Question 12

How is appreciable property given to a charity calculated?

Answer 12

Short term property- adjusted basis

long-term - appreciated value (fmv)

Question 13

what is the basis of property acquired as a gift?

Answer 13

retains rollover basis (adjusted basis) 
exceptions exist (adjusted Basis > FMV)

Question 14

how are organizational expenses treated?

Answer 14

the first 5,000 is expensed immediately and the remainder is amorized over 180 months (15yrs)

Question 15

capital losses treated?

Answer 15

capital losses could only offset capital gains.
for individuals 3000 could be uses to offselt ordinary income.
the reaminder, carry back 3, CF 5yrs

Question 16

are self-employed individuals able to deduct their own health insurance?

Answer 16

yes!

Question 17

1) How can one qualify for the exclusion on Gain on sale of Residence?
2) What are the maximum exclusions? single? married?

Answer 17

1) The home was your primary residence for 2 out of the past 5 years.
2) single 250,000 Married: 500,000

Question 18

Are realized losses ever recognized on like-kind-exchanges (even when their’s boot)?

Answer 18

No! There would be no Gain/loss recognized is this case.

Question 19

What are 1231 Assets

Answer 19

Depreciable property used in a trade or business

in use for more than a year (Long-term)