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Which itemized deductions are NOT subject to phase outs?

Gambling losses, investment interest, medical expenses, and casualty losses (GIMC).


How is an incentive stock option (ISO) treated for AMT purposes?

ISOs are taxed when exercised


A claim for a refund must be filed when?

Within 3 years from the date the return was filed and 2 years from the date the tax was paid, whichever is later.


When must Form 1040X be filed?

Within 3 years of the original return due date or 2 years after actual payment of tax.


Which tax credits are refundable?

EIC, child tax credit, and the American Opportunity Tax Credit is partially refundable.


Does an individual have to recognize a gain on the sale of a personal residence?

Not if they lived in it for 2 out of the last 5 years. The first $250k on the gain on sale is not recognized ($500k MFJ).


When are dividends recognized as income for an individual?

Dividends are recognized when received, not when declared.


What can the AOTC and lifetime learning credit be applied to?

Tuition, fees, books, and direct supplies.


How much can a business owner contribute to a Keogh plan?

20% of SE income b/f the Keogh deduction.


When is rent received in advance taxable?

Rent is taxable in the period received, but rent paid in advance is not deductible until incurred.


When are dividends taxable?

In the period received


When is a dwelling unit considered a home?

If personal use exceeds the greater of 14 days or 10% of the days rented


When would rental income and/or rental deductions be excluded from gross income?

When a home is rented for less than 15 days during the tax year.


Who may not use the cash basis?

C corps with gross receipts in excess of $25M, tax shelters, partnerships that have a C corp as a partner exceeding $25M, and where inventory is used in the determination of income.


How is the receipt of stock as compensation included gross income?

Included in gross income at FMV.


Can the adoption credit be carried forward?

Yes, up to 5 years.


Are rental activities considered passive?

Yes, all rental activities are considered passive regardless of participation.


What are the contribution limits to charities for individuals and corporations?

50% of AGI (60% for cash contributions) and 10% of ATI and either can carry forward for up to 5 years..


What is the LTCG rule in regards to property being donated to charities?

For property that has appreciated and has been held for over a year. The donor can claim the higher FMV of LTCG property, but is limited to 30% of AGI in a tax year.


Where are hobby losses deducted?

Hobby losses are no longer deductible, but hobby revenue must be reported as income.


What is considered a hobby loss?

If it did not yield a profit in the last 3 of 5 years, it is considered a hobby loss.


What are the AMT tax rates?



When is social security benefits taxable?

When provisional income exceeds $60k.


How are capital gains/losses reported?

Form 8949, then report totals on Sch. D.


Are losses from rental real estate activities deductible?

Only if there is active participation.


When is a state income tax refund not taxable?

When the individual did not itemize in the previous year.


What is the deduction for a casualty loss?

The lower of the decline in the FMV of the property or the adjusted basis of the property.


Can an individual carry back a capital loss?

No, they can be carried forward indefinitely.


How is the home office deduction calculated?

Cannot exceed net business income


For purposes of an IRA, earned income includes what?

Salaries and wages and net SE income