EA Part I Flashcards
With shared property, how do we determine the basis of the survivor?
Amt paid + portion of FMV at death - 1/2 depreciation
What is form 5329?
Used to calculate AMT liability
What is the amount excludable from income for a qualified, tangible property award?
the excludable amount is limited to the employer’s cost and cannot be more than $1,600
What expenses can qualify for adoption credit?
expenses paid prior to the year the adoption becomes final, the credit is allowed for the year following the year of payment.
For qualifying expenses in the current year for an adoption which became final in the current year may be eligible to claim the credit for the expenses on the current year return, and expenses paid in a prior year.
Who may contribute to a traditional IRA?.
Anyone may contribute to a traditional IRA, even if the contribution is not deductible.
By when must IRA contributions be made to claim them on a return?
IRA contributions are required by the original due date of the return, NOT including extensions
What is the limit for IRA contributions being deductible for someone not covered by an employer plan but filing jointly with a spouse who does have a plan through work?
when MAGI doesn’t exceed $178,000 .
What is the amount a taxpayer may deduct as an ordinary loss on Sec. 1244 small business stock?
Single= $50,000 each year. MFJ = $100,000, even if only one spouse has this type of loss. The remaining $30,000 is eligible for capital loss treatment.
What is the formula to decide if social security benefits are taxable?
taxable if total income plus 1/2 of social security is greater than 32K
Qualified education expenses must be reduced by any tax-free educational assistance and by any refunds of expenses. What does that include?
tax-free educational assistance, a tax-free scholarship, Pell grant, or tax-free employer-provided educational assistance. IRS Form 8917.
What is the effect of a non-dividend (return of capital) distribution?
It reduces shareholder basis in the stock. .
When are non-dividend (return of capital) distributions taxed?
Non-dividend distributions are not taxed when distributions are made unless the distribution exceeds the adjusted basis
When does a household employee receive a W-2?
if they received cash wages in excess of $1,800 or had withheld taxes
At what amount is the employer required to pay tax on a household employee?
if a household employee is paid cash wages over $1,800 in 2013, the employer must pay 15.3% of wages (7.65% employer, 7.65% employee).
When must an employer pay FUTA on a household employee?
If the combined cash wages of all household employees is $1,000 or more in any calendar quarter the taxpayer must pay .6% on the first $7,000 of cash wages for each employee as federal unemployment tax.
