Tax

Question 1

Boot received =

Boot paid =

Basis ____ from previous property

Answer 1

= recognized gain

= add to basis

carries over

Question 2

1250 depreciation recapture

Ex.) Land bought for $100K three years ago, depreciation $25K, sold for $140K

Answer 2

25% on depreciation is taxable

and gain from sale is tax at Capital Gains rate

$25K @ 25% = $6,250

$40K gain @ LTCG

Question 3

Beneficiaries must report income from Trust/Estate even in not ___ that year

Answer 3

Must report even if not distributed that year

Question 4

Section 1244 stock allows single and MFJ to write off how much? and against what? and how much can be carried forward each year?

Answer 4

Can write off $50K and $100K against ordinary income each year (instead of a $3,000 cost carrying forward with normal stock)

Question 5

Income from a S-corp increases ____ and avoid what type of tax?

Answer 5

Increases basis and avoid FICA and FUTA tax