Deck 12 Flashcards Preview

Regulation > Deck 12 > Flashcards

Flashcards in Deck 12 Deck (20):
1

What costs cannot be amortized for tax purposes?

stock issuance costs

2

What is the maximum amount of capital losses in excess of capital gains that a C corporation may deduct in a year?

Corporations may not deduct any capital losses in excess of capital gains in a year

3

A personal service corporation (PSC) is primarily involved in the performance of one of the following fields:

Accounting, law, consulting, engineering, architecture, healthy, and actuarial science

4

A personal services corporation may only deduct payments to an employee-owner in the year it is:

Included in income by the recipient

5

Taxes payable under the Federal Unemployment Tax Act (FUTA):

Credits for this tax are allowed to employers for certain state unemployment taxes paid by the employer.

6

General rule for corporations:

No gain or loss recognized

7

Basis of property that corporation receives is the greater of:

adjusted basis (net book value) or debt assume by corporation

8

Basis in property is:

Net book value (nontaxable)

9

Basis in services:

fair market value (taxable)

10

What happens when liabilities exceed the basis:

Gain is recognized for the excess

11

Stock basis =

NBV assets - liability

12

Examples of miscellaneous itemized deductions:

unreimbursed business expenses, business gifts,

13

Health insurance premiums paid by a self-employed individual are:

100% deductible as an adjustment from AGI

14

Penalties on early withdrawals of savings are: adjustment for AGI or from AGI?

Adjustment for AGI

15

Do qualifying medical expenses include drug treatments?

Yes; treatment, lodging, and meals are all covered

16

Schedule A

Personal expenses

17

Health insurance premiums that are deductible include:

premiums paid by a set-employed individual, insurance premiums paid by a taxpayer with after-tax dollars (Personal disability premiums are not deductible

18

Interest expense that is not deductible includes:

Mortgage interest paid on commercial property, interest paid on personal credit cards, and interest paid to IRS for late filing of income tax return

19

schedule M-1

Reconciles permanent and temporary differences between book income and taxable income

20

Domestic Production Deduction:

9% of the lessor of: 1) qualified production activities income or 2) taxable income