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Flashcards in REG 31 Deck (18):
1

Are the following on Schedule C:
Gain on Sale of Business Truck
Contributions to Keogh Plan
Net Operating Loss from Year 5

No not on schedule C - sale of business assets reported on form 4797, could end up on schedule D or on 1040 as an ordinary gain
No not on Schedule C
No not on Schedule C

2

Form 4797 Sale of business property Used to compute _______ and _______ gains and losses

Ordinary flow to 1040
Capital to schedule D

3

SSI tax rate

15.3
7.65 from each

4

Rules for Stock Options
ISO
There's also non-qualified
Where is it in IRC

It's in deferred comp Section D
ISO - no tax consequence when received or when exercised
if
Your hold it for 2. years after the grant, 1 year after the exercise
Must be employed by th ecompany from the grant date to 3 months prior to the exercise

5

IRA deductions can only contribute if you have what

earned income

6

AGI Preference Items - Panic TimMe

Passive activity
Accelerated depreciation
NEt operating Loss
Installment sale Income dealer
Contracts - Completed No - % of completion Yes

Taxes - State and Local
Interes home equity loans
Medical 7.5-10 if over age 65
Misc. over 2%
Exemptions and standard deduction

7

AMT - Medical expenses exceeding the 10% are allowed
What are AMT Tax Preferences?

In Panic Time they are the first two and Incentive stock options

Private Activity Bond Interst
Incentive Stock Options
Excess Depreciation on Personal Property

I really can't remember it's the difference

8

Carryforward and Carryback for Individuals
Charitable Contributions
NOLs
Net Capital Losses
Investment Interst
Net Passive Losses
Net Gambling Losses

Charitable - No Carryback, 5 year forward
NEt Capital Losses - Corporations - 2/20
Net Capital Losses - Individuals - 0/Indefinitely
Investment Interst - Indefinitely
Net Passive Losses - Indefinitely
Gambling Never

9

Carryback/Forward - Charitable
NOLs - 2/20
Capital Losses Corps - 3/5
Capital Losses Indiv - 0/forever
Net Passive Losses - FORever
Gambling - Never

5 years forward

10

2/20 what it is it?

Net Operating Losses - 20/20 is a loser show

11

5 year carryforward

Charitable contributions

12

3/5

Capital Losses Corporations

13

0/forever

Capital losses individuals

14

0/Indefnitely or until sold

Passive losses real estate

15

Net Capital Gain vs. Net Capital Gain INcome

INcome means ST Gain (i.e., ordinary income)

The first is when ST gains are netted out against LT GAins and the special rates apply to the LT Gaiin

The second is the ST ordinary income gain.

16

Qualified Small Business Stock

HOld it for 5 years
Not sure what else
Only 50% of the gain is taxable

17

Section 1244 Small business Stock losses (gains must be somewhere else)

Not more than 50% of gross receipts was from passive income activities
Gain is LT Gain (not 1244 however, it's section 1202)
Loss is ordinary loss
Limitation on losses is 50K single or 100K joint
Couldn't take in more than 1M in PIC

All this is in Subchapter P BTW

18

Section 1202 Gains on SB Stock

This is for an initial investment in a small business
Of course the absurdity is small is 50,000,000 in assets

Must hold more than 5 years
50% of gains aren't taxed at all, remainder at 28% rate, actually now there's all kinds of dates in there, but as of 2015, it's 50%
No more than 10 million exclusion
It can't be a S corp or a LLC
I can't be a service corporation (law, health, accounting, consulting, brokerage, banking, farming, hotel).
7% is excluded gain is added back as an AMT preference item