Reg2

Question 1

Educator expenses are above or below the line?

Answer 1

Above

Question 2

What are the educator expenses?

Answer 2

Must be kindergarten thru grade 12, max 250 per person

Question 3

What are the two condititons when a taxypayer will not deduct a contribution to an IRA?

Answer 3

1. Excessive AGI (aka Rich) 56K plus AND 2.) active participation in another qualified plan

Question 4

What are the tax impact of Roth IRA contributions?

Answer 4

NONE, not deductibe when made and not taxed when withdrawn

Question 5

What taxes are non-deductible?

Answer 5

FIB F-Federal taxes I-Ineritance taxes for states (aka federal estate pick-up tax) B-Business (on sch C) and rental property taxes (on sch E)

Question 6

What are the limiatations for charitable contributions deduction?

Answer 6

50% overall limit of AGI Cash is limited to 50% of AGI, general property is lesser of basis or FMV and long-term appreciated property is limited to 30% of AGI (remember we can deduct the FMV and not the basis (so land went up in value of 10,000 I get to deduct the extra 10,000 but not pay tax on it))

Question 7

What are the adjustments for the AMT?

Answer 7

PANIC TIMME P-Passive activity losses A-Acceleratred depreciation (post 1986 purchase) N-Net operating loss fo the indiviudal taxpayer I-Installment income of a dealer C-Contracts-percentage completiov vs. completed contract T-Tax “deductions” I-Interest deductions on shome home “equity loans” M-Medical deductions (limited to excess over 10% AGI) M-Miscellaneous deductions NOT allowed E-Exemptions (personal) and standard deduction

Question 8

What are the tax prefernce itmes for AMT?

Answer 8

PPP P-Private activity bond interest income P-Percentage depletion the excess over adjusted basis of propery P-Pre-1987 accelerated depreciation

Question 9

Can tax prefercne itmes for AMT be subtracted from regular income?

Answer 9

No, they are always add-backs

Question 10

What tax credits are permitted as a credit to reduce the AMT?

Answer 10

FACCE F-Foreign tax credit A-Adoption credit C-Child tax credit C-Contributions to retirment plans credit E-Eanred income credit

Question 11

What are the stature of limiataions for tax retruns?

Answer 11

Normally 3 yrs from later of due date or date reutrn is filed, IF over 25% understatment of gross ncome then 6 yrs and IF fraud then NO stature of limiations