Cpa Flashcards
(25 cards)
Related party sale or exhange sale loss
Loss is disallowed if it results from a sale or exchange between a corporation and a person who owns (directly or constructively) more than 50 % of its stock
What additions should be made to taxable income when earnings and profits are computed?
Municipal interest;
Life insurance income;
Dividends received deduction;
Deductions claimed for carryforward from prior years;
The deferred portion of a gain from a current installment sale;
The amount of depreciation deducted in excess of straight-line.
Items that are not deductible for purposes of computing alternative minimum taxable income for individuals.
- State income tax
- Medical Expenses amounting to 10% of AGI
- Home Equity mortgage interest loan when NOT used to buy a home
What effect does property distribution have on earnings and profits?
- Reduce E&P by greater of adjusted basis or value, then reduced by any liabilities assumed by shareholder; 2. Distributions of appreciated property also increase E&P by amount of gain.
Tax Schedule A
A- Itemized Deductions (Personal and Employee expenses)
Schedule B
Interest and Dividend Income
Schedule C
Profit and loss from a business ( Employer expenses) / 1099 Income
Schedule D
Capital Gains and Losses ( S/T and L/T Investments)
Schedule E
Supplementary income or Loss (RRF-COP) - rental income - royalties ( copyrights, oil/gas leases, patents) Flow through entities ( s-corp, partnerships, estates and trusts)
Schedule F
Profit and Loss from Farming
1040x
Amended return ( 3 years)
Foreign Tax Credit
1116
4562
Depreciation and Amortization
4797
Sale of L/T business Property ( Not inventory or receivables - schedule C)
AMT - Individuals - Adjustments - SIMPLE
Standard Deduction MAY NOT BE CLAIMED
AMT - Individuals - Adjustments - SIMPLE
INTEREST ON HOME EQUITY LOANS NOT DEDUCTED - unless to buy, build or improve main home ( may still claim interest on acquisition indebtedness and investments
AMT - Individuals - Adjustments - SIMPLE
MEDICAL EXPENSES UNDER 10 % OF AGI CANNOT REDUCE AMTI
AMT - Individuals - Adjustments - SIMPLE
PERSONAL AND DEPENDENT EXEMPTIONS ARE NOT ALLOWED
AMT - Individuals - Adjustments - SIMPLE
LOCAL AND STATE INCOME TAXES, ALL PROPERTY TAXES AND SALES TAXES ARE NOT DEDUCTIBLE
AMT - Individuals - Adjustments - SIMPLE
EMPLOYEE BUSINESS EXPENSES, TAX PREPARATION AND INVESTMENT EXPENSES SUBJECT TO THE 2 % (BIT) THRESHOLD ARE NOT DEDUCTIBLE
TAX PREFERENCES WHICH CAN ONLY INCREASE AMTI - PIE
PRIVATE ACTIVITY BOND INTEREST IS FULLY TAXABLE
TAX PREFERENCES WHICH CAN ONLY INCREASE AMTI - PIE
INCENTIVE STOCK OPTIONS - TAXED WHEN EXERCISED FOR THE DIFFERENCE BETWEEN THE EXERCISE PRICE AND MARKET PRICE
TAX PREFERENCES WHICH CAN ONLY INCREASE AMTI - PIE
EXCESS DEPRECIATION ON PERSONAL PROPERTY - OVER 150 % DDB WHEN DOUBLE DECLINING BALANCE WAS USED FOR REGULAR TAX PURPOSES
CORP TAX NON RECOGNITION OF GAIN
APPLIES TO AMTS TRANSFERRED FOR STOCK - IF SHAREHOLDER RECEIVES CASH OR OTHER PROPERTY IN ADDITION TO STOCK, GAIN IS RECOGNIZED UP TO THE AMOUNF OF CASH OR FMV OF OTHER PROPERTY RECEIVED
