TAX Flashcards
(27 cards)
Is a penalty owed on the interest of unpaid tax due to fraud/negligence?
No, penalty is only on the unpaid tax, not on the interest of the unpaid tax.
See tax 1-5 applying the fact.
What’s deductible for SE, partners, and 2% owners?
Medical ins
Dental ins
LTC ins
Disability Ins
All EXCEPT disability ins. DI CANNOT be deductible. However group DI is allowable fringe benefit.
Self employment tax rate
14.13%
If home office expenses are $10K with net sch C income of $8K, how much is deductible?
Only $8K, not full $10K. Home office expenses are allowable for SE but CANNOT create a loss.
Are misc expenses deductible?
No, misc itemized deduction were repealed in TCJA.
What is SE income and subject to SE income tax?
Net sch C income
Part time earnings (1099s)
Board of directors’ fees
General partnership income (K1)
…
note NOT s-corp K1s
Child tax credit amount
$2K for any kid under 17
(Subject to AGI phaseout)
Dependent care credit
3K first kid, 6K for second or more. Then, 20% of either 3K or 6K. ($600 or $1200)
How much is FICA tax?
7.65% for one. (6.2 SS + 1.45 Medicare)
(7.65 + 7.65 for empEE and empER)
MACRS years for auto, computers, trucks
5 yr - 1245 property
MACRS years for office furniture and fixtures
7 yrs - 1245 property
MACRS years for residential rental RE
27.5 yrs - 1250 property
MACRS years for non-residential RE
39 yrs - 1250 property
MACRS Table
5yr 7yr
Yr 1 20% 14.29%
Yr 2 32% 24.49%
Section 179
100% deduction of 1245 property in first year.
Helpful for $ purposes as well as not having to keep MACRS schedule.
Can count 1099 income too, but CANNOT create NOL for the biz.
Section 121
Exclusion of 250/500 cap gains on home. Must live in for 2 of 5 years prior.
Section 1231 gain
Capital gain. When doing CRDs, difference between gain and CRD, NOT crd and sales proceeds.
What’s the recognized gain in installment sale? (Profit)
Profit amount / sale price = % of installment taxable
What happens to CRDs if property sold as installment sale?
IF CRDs are more than captain gain (sale - basis), CRD recognized in sale year as 1245 gain recapture (ordinary income)
AMT preference items
IPOD
Intangible drilling costs
Private activity mini bonds
Oil/gas % depletion
Depreciation
AMT add-back items
SALT
ISO bargain element
Charitable Deduction Maximums
Total 60%
Cash = 60% annual max
LT App Prop. = FMV or Basis 30 or 50% AGI
Ordinary Prop. = Basis, 50% AGI
Loss Prop. = FMV, but 50%
Casualty Loss Deduction. Calculating deductible amount….
Value of prop lost
Minus insurance coverage
Minus $100
Minus 10% of AGI
Remaining amount is deductible.
Casualty Loss Deduction. Calculating deductible amount….
Lesser of FMV/basis value of prop lost
Minus insurance coverage
Minus $100
Minus 10% of AGI
Remaining amount is deductible.
