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Flashcards in REG 11 Deck (18):

What are the AMT exemption amounts

Single 53,600
Married 83,400
MFSeparately 41700
HOH 53,600


When it comes to the medical and you are over 65 do these get added back in.

Yes, whatever you took over the 7.5% for over 65 (10% for everyone else) gets added back in


Where do limited charitable contributions come into play as far as itemized deductions.

Not the Alternative Minimum tax, charitable still allowable

Limitations on Itemized deductions for high income earners is where the charitable income deduction limitation comes into play.


Where does the phase out of the activity loss limitation for actively managed real estate start and how much of these losses can you deduct.

$25,000 and it starts at $100,000 it's 50% of the amount over $100,000 so if you made 120,000 you'd only get 15,000


How much of the gain from the sale of small business stock can you exclude after you hold it for how long

50% for 5 years.


Inherited property is automatically what type of gain/loss?

It's always long term, no matter how long you hold and even though you're using the FMV as the basis.


Section 1244 Small Business Stock
Only have to pay tax on 50% of gains, what about losses

Section of Code 26=A-Chapter 1- Subchapter P Cap Gains and Losses - 1244 Losses on sale of small business stock

Can take up to $50,000 as an ordinary loss and the rest is a capital loss


Your landlord offers you $10,000 to get out of your 2 year lease early. You started to rent the apartment 16 months ago. What is the nature of the $10,000 (e.g., ordinary income of capital gain - LT or ST).

It's a LT capital gain.


If a security becomes worthless during a taxable year it's treated as sold when?

On the last day of the taxable year.


Related party transactions on personal income tax returns, Sell your stock to your kid at less than FMV (at a loss) what happens?

You don't recognize that loss, basically the kid uses your higher basis. They talk about "disallowing" the loss that was the result of the less than arms length transaction.

The longer holding period only applies if there's a gain when you sell it (i.e., you use the parents basis.)


Related party sales - how about the holding period?

Well, you get nothing if you sell it to the kid for a loss. The kid uses that as the basis and then, if it's sold at a gain, disallows that part of the gain up to your original cost.


Who is a related party?

Anscestors, descendants, spouses, siblings. Basically anyone who is related to you and could inherit from you.


When does the holding period start for related party?

Starts on the day they sold you the stock.


Related parties.

Transferring stock - if it's inbetween parents basis


What is a related party as far as corporation.

Owns more than 50%
Losses are not allowed on corporation tax return for sales to related parties.


Are in-laws related parties?

No it's blood descendants only.


DRD Percentages
Be careful to watch out for what?

DRD only allowed for corporations subject to us income tax.

Less than 20% = 70% reduction
20% to 80% = 80% reduction
Over 80% = 100%


Corps Charitable Contributions
What do you add back to income before you apply the 10%

Charitable contributions
Anything that has anything to do with Loss carryback
the DRD deduction