REG 2.0 Flashcards
(15 cards)
*When donating long term capital gain property what is the maximum allowable charity contribution?
- Deduct the FMV up to 30% of AGI
- Or stock donation value of cost basis if less than 1 year
*In order to deduct fair market value what are the stipulations?
*Longer than one year
*What is 2% rule?
*Can only deduct expenses which exceed AGI by 2%
*Which deductions can be taken above the line?( To arrive at AGI)
- Traditional IRA
- Real Estate Taxes
- Alimony
- Moving Expenses
- Retirement for self employed
- Employer portion of Social Security
- Student Loan Interest (2,500 Max)
- HSA 100%
- Self Employment Tax 50% (not an itemized deduction)
- Penalties on early withdrawls (retirement accounts)
- Capital losses in excess of capital gains
- Trade or business expenses (deducted on schedule C)
- Jury duty repayments
*Which deductions taken below the line? (To deduct from AGI)
- Medical and dental expenses (include professional medical services, insurance premiums for medical care i.e. pres drugs)
- TAXES PAID (show up often on CPA)
- Interest paid (investment interest) (No AGI on deduction of interest)
- Charity
- Causality/theft
- Miss subject to 2% floor (job exp, investment exp, tax prep)
- Trade or business expenses
- Other miss not subject 2% (gambling)
**Itemized deductions and personal exemptions subtracted from AGI to determine tax income
- What are the carry rule for NOL and Charity
* Investment Interest can only be deductible up to?
- NOL = 2 back 20 forward
- Charity = 5 forward (excess amount contributed over the fair value of services provided)
*Itemized deduction limited to lesser net investment income or investment interest expense
- To deduct causality losses what must occur?
* How do you calculate
*Must exceed $100 and above 10% AGI
- Decline FMV OR use adjusted basis (aka value before)
- 100
- 10% AGI
- Insurance recovery
*Classify which moving expenses are deductible?
- YES (direct moving expenses)
- Travel along the way
- Lodging to get there, transportation
- Cost of moving household furnishings
- No
- Temp living exp
- Along the way meal exp
- An individual submits a claim for a refund of erroneously paid income taxes on what form?
- For an understatement of income over 25% the statue of limitations would last how many years?
- 1040X
* 6
*What are the tax levels of support from least to most strict?
- Reasonable basis (20%)
- Realistic possibility
- Substantial authority (33%)
- More likely than not (most stringent) (50%)
- Qualifying medical expenses include what?
- With disabilities what is considered medical expense?
- Can fine or penalty insurance be deducted?
*Inpatient treatment, lodging, meals
- The amount of money spent subtracted by the increase in home value
- Upkeep is also included
*No
*What is AMT Calculation for joint and single?
- 83,800 minus 25% above 159,700 threshold (joint filers)
- 53,900 minus 25% above 119,700 (single filers)
*EXAMPLE:
AMTI 259,700
Thres (159,700)
Excess 100,000 * 25% = 25,000
83,800 - 25,000 = 58,800 exemption
*How to compute AMT for personal income tax? (PANIC TIME)
- Add or Sub
- Passive activity losses
- Accelerated depreciation
- Net operating losses
- Installment income and dealer
- Contracts, percentage completion vs. completed contract
- Add
- Tax DEDUCTIONS
- Interest deductions (qualified housing or mortgage interest not used to buy build)
- Medical deductions
- Miscellaneous deductions
- Exemptions (personal) and standard deduction
*Explain the Keogh profit sharing plan
*To calculate multiply 20% by self employment income then subtract Keogh deduction of 53K
*Itemized deductions not allowed in calculating AMT
- Miscellaneous itemized deductions
- State, local, and foreign income taxes
- Real and personal property
