Deck 37 Flashcards Preview

Regulation > Deck 37 > Flashcards

Flashcards in Deck 37 Deck (28):
1

Capital expenditure for the improvement of a home is deductible to the extent that:

The expenditure exceeds the increase in the value of the home (Difference between improvement and cost)

2

Accumulated earnings tax can be imposed regardless of:

The number of stockholders in a corporation

3

An option held by an investor is considered what kind of asset:

Capital asset

4

The cost of worthless stock or securities is treated as:

A capital loss as if they were sold on the last day of the taxable year

5

A holder in due course is only subject to what kind of defenses:

Real defenses (fraud in the execution, insolvency, and infancy are real defenses). Breach of contract is not a real defense

6

In filing a consolidated federal income tax return, a corporate group eliminates:

Dividends

7

For a corporation, a net long-term capital loss is not deductible in the:

Current year (carry back 3 and forward 5 years)

8

2015 maximum allowable 179 deduction

$25,000

9

Goods sold for over $500 do not have to be in writing if the following take place:

SWAP (Specialty manufactured goods, written confirmation, admitted in court, and performed)

10

American opportunity credit calculation =

First $2,000 + 25% of the next amount up to $2000

11

Lifetime learning credit =

20% of qualified expenses up to $10,000

12

What qualifies as a like-kind exchange?

Investment land for building to be used in a trade or business

13

General advertising is prohibited in under what rules:

Regulation D 505 and 506

14

How does a return of capital effect basis?

Reduces shareholders basis

15

What kind of income is not considered personal holding company income?

Bonuses

16

Non qualified stock is recognized as:

Ordinary income

17

Complex trust

Distribute principal

18

Building is subject to a mortgage that is assumed by the partnership, how is the partners interest affected?

The basis is reduced by the liabilities assumed by the other partners

19

A seller is entitled to recover the full contract price from the buyer when the:

Goods are destroyed while the risk of loss is with the buyer

20

A reorganization plan under Ch. 11 will not be approved unless the plan provides for:

The full payment of administration expenses

21

Preferential payment is:

1) transfer made to or for the benefit of a creditor; 2) on account of an antecedent debt; 3) Made within 90 days prior to the filing of a petition; and 4) results in the creditor receiving more than the creditor would have received under the bankruptcy code

22

Immediately upon filing of a petition in bankruptcy, creditors are:

Stopped from pursuing collection actions against the debtor (automatic stay)

23

What kind of income is subject to self-employment tax?

Earned compensation (guaranteed payments, not ordinary income from an S Corp.)

24

When a tax return has not been filed, any claim for refund must be made within:

2 years from the time the tax was paid

25

A taxpayer can file a claim for refund by the later of:

3 years from the time the return was filed, 3 years from the original due date of the return, or two years from the time the tax was paid

26

Corporations basis =

Carryover + any cash paid (doesn't include mortgages)

27

The value of a partnership interest acquired for services rendered is:

Ordinary income to the partner (at FMV)

28

In a liquidating distribution, we have to:

Zero out to get out (Even if the items value is less than what it would be to zero out)