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Flashcards in REG 5 Deck (17):

Corporate Share Holders Right to: five things

hareholders do not have the right to manage the corporation or its business. Shareholder participation in policy and management is through exercising the right to elect directors. Shareholders also have the right to approve charter amendments, disposition of all or substantially all of the corporation’s assets, mergers and consolidations, and dissolutions.

Elect Directors
Approve Charter Amendments
Approve Disposition of Substantially all Corps Assets
Approve Mergers and Consolidations
Approve Dissolutions



If spouse dies during year what is best status?

can still file jointly and take the exemption for spouse provided you don't remarry


Filing Status

Qualifying widower

I think it goes joint, qualifying widower, qualifying widower
For each of the two years after their death
Must have a qualifying child or stepchild in the home
Has the lowest rates - below HOH
NOTE IT'S THE TWO years after, the first year is Joint


Are funds placed in escrow for the sale of real estate in one year and released in the next income for a taxpayer?

No - constructive receipt means you have control over.


Rental Income When to Recognize

For Income - Advance Rent Payments

Advance Rent Payments Recognized When Received, this includes security deposits that are last month's rent

I think it's the expense that has to be allocated out , no prepaid rent


If the tenant pays for the paint job and doesn't get a reduction in rent can you deduct it

No, obviously not, it's a leasehold improvement, but one you didn't pay for


Gambling Winnings
Where are they reported?
Gambling Losses
Where are they reported?

Winnings: Line 21 Other Income - Income "Above the Line"
Losses: Schedule A - Other Deductions not subject to the 2% floor and only to the extent of gambling winnings


Things I'm not doing: Kehogh SEP deduction limits
But if you want a simple formula take the gross self employment earnings x .185 (if they are taking the max) or 53000 whichever is less

Really couldn't figure this one out.


What's the employer portion of SE Tax\



If you unemployed, can you deduct moving expenses.

Yep, the requirement is that you have to be employed 39 weeks after you move and so tell me just how are they going to check that?


How much can. you contribute to a Coverdell Education Savings Account.

Married filing jointly is $2,000 if AGI is below $190,000 for joint and $95,000

There's also 0 if it's over 220,110


How much can you deduct for education loan interest?

$2,500 not sure if it matters if you are a dependent on another's return


Moving Expenses = Are meals deductible? Lodging?

No on the meals, yes on the lodging, tolls, travel expenses.


Maximum deduction for interest on schedule A from Aquisition Debt and Home Equity Indebtedness - i.e., how much of the debt can you deduct interest on

on Joint it's only up to the first $1,000,000 of acquisition and $100,000 of Home equity

But if the home equity is more than the fmv of the residence it's only up to that


Does it matter if you use your refinance or heloc to go on vacation, is the interest still deductible.

This question says yes. Or maybe it's saying that it's qualified residence interest versus personal interest.


Is interest on a loan for medical expenses personal interest or deductible interest.

It's not deductible. If you borrowed money on your house that would be residence interest and that would be deductible.


Investment Interest - When and where can you deduct this?

Can you carry forward what you didn't deduct.

You can deduct it to the extent of investment income, but not for passive activities. It's deductible on schedule A.

Carryforward - Yes.