REG SIM Flashcards
1
Q
- What is failure to file penalty?
* What is failure to pay penalty?
A
- 100% of unpaid tax or $135 whichever smaller
* .5% each month late
2
Q
- After taking into account the full DRD if a net operating loss occurs what do you do with the charitable contribution deduction?
- What is the exception for the DRD
A
- Charitable contribution is not deducted in this case
- Lesser of DRD (70% or 80%) or (70% or 80%) of taxable income (DRD and income or loss) computed
- (20,000) loss 200,000 own 25% of Div Rec. 200,000 x .80 = 160,000 or 180,000 x .80 = 144,000. Diff 36,000
3
Q
CHAPTER 3
*When forming a corporation how to determine gain realized, gain recognized, and tax basis
A
Realized = FMV contributed - Basis contributed
Recognized = to the extent of boot received
Tax Basis = NBV - Liability + Cash Contributed
**Basis of property received by corp = GREATER of NBV including gain from boot received or Debt assumed by corporation
4
Q
- Concerning DRD what must you account for with losses?
- What is the DRD?
- M1 Rec from book to tax what do you start with
A
- After taking into account, DRD is negative then charitable contribution not used
- Lesser of DRD times % (200 x 80%) or Dividend netted with preliminary tax income times % ((200 + (20)) x .80%)
- Book Net Income
5
Q
- How is partnership transactions normally handled?
* Tax liability for limit before underpayment of tax liability assessed for Personal and Corp
A
*NBV for partnerships. Tax refers to FMV
*Personal =1,000
Corp =500
6
Q
- When looking at homes how is depreciation considered?
* How to calculate gain when partial rental activity?
A
- Subtract depreciation from basis of home
- Any depreciation would be a taxable gain if home office, then do ratio after exclusion amount to determine how much gain
7
Q
- American Opportunity Credit
* Lifetime Learn Credit
A
- AOC
- Undergrad
- 2,500 Max (2,000 than 25% next 2,000)
- LLC
- 20%of qualified expenses up to $10,000
- Unlimited number of years available
