Property Taxation

Question 1

Real property

Answer 1

Land and all items permanently affixed to land

Question 2

Personal property

Answer 2

everything else

Question 3

Gifted property basis

Answer 3

Retains the cost basis it had when in the hands of the gifter at the time of gift

Question 4

Inherited Property Basis

Answer 4

FMV on date of death, automatically considered long term

Question 5

Personal to business use property

Answer 5

The lessor of the original cost basis or FMV @ date of conversion

Question 6

Section 197 Intangible Assets

Answer 6

Goodwill
Going concern value
Covenant not to compete
Licenses & permits
Customer or supplier lists
Franchises, trademarks, & trade names
Patents, copyrights, etc.

Question 7

Organizational Costs
(Partnership or Corporation)

Answer 7

Allowed to expense 1st $5,000
legal fees
accounting fees
filing fees
Organizational meetings

Question 8

Start-up costs
(Sole proprietorship, Partnership, or Corp)

Answer 8

Allowed to expense 1st $5,000
investigation of markets/location/products
marketing & advertising
costs to secure distributors/suppliers/customers
Worker hiring & training
Facility & equipment setup

Question 9

Collectibles

Answer 9

LT gains are taxed at 28% - Section 1202
Include: Works of Art, stamp/coin collections, antiques

Question 10

Qualified Small Business Stock

Answer 10

-Original issuance of C-Corp stock held for more than 5 years
-No more than $50 million
-Can exclude $10 million or 10 times basis-whichever is greater

Question 11

Capital losses

Answer 11

Max $3000 against ordinary income, passive income, or portfolio income
-carryforward for an unlimited time & maintains ST or LT

Question 12

C-Corp Capital Gains

Answer 12

Net gains are added to ordinary income & taxed at regular tax rate. There is no distinction between LT & ST

Question 13

Losses (nondeductible)

Answer 13

Wash Sale losses
Related party losses
And
Personal losses

Question 14

Wash Sale Loss

Answer 14

When a security is sold for a loss and repurchased within 30 days.
Use original date of purchase
Basis of old security - Proceeds of sale + Purchase price of new security

Question 15

MACRS

Answer 15

3-10 year - 200% declining balance
15-20 year - 150% declining balance
Salvage Value ignored

Question 16

Half-year

Answer 16

Allowed 6 months in year of purchase and 6 months in year of disposition

Question 17

Mid-quarter

Answer 17

If more that 40% of personal property is purchased in last quarter
Q1 12.5% (1.5/12)
Q2 37.5% (4.5/12)
Q3 62.5% (7.5/12)
Q4 87.5% (10.5/12)

Question 18

Residential Rental Property

Answer 18

27.5 yr SL

Question 19

Nonresidential Real Property

Answer 19

39 y SL

Question 20

Straightline depreciation

Answer 20

1/2 mo taken when acquired
1/2 mo taken when disposed

Question 21

Section 179

Answer 21

2024 allowance $1,220,000

Question 22

Bonus Depreciation

Answer 22

Qualified property is 20 yr or less
2018-2022 100%
2023 80%
2024 60%
2025 40%
2026 20%
$8000 bonus on yr 1 of vehicles