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Flashcards in Taxation Calculations Deck (15):

What is the AMT Formula for corporations? 14 steps

Regular taxable income before NOL carry forward
+ tax preference items
+/- adjustments
= pre Ace AMTI
+/- Ace Adjustment
- exemption amount
= AMTI tax base
X 20% rate
= tentative minimum tax before foreign tax credit
- AMT foreign tax credit
= Tentative minimum tax (TMT)
- regular income tax - regular foreign tax credit
= AMT (if positive)


Maximum exemption on corporate AMT?



What does TMT stand for?

Tentative minimum tax


What is the formula for Personal Holding Company (PHC) tax? 14 steps

Taxable income
+ dividends received deduction
+ NOL deduction (except NOL preceding year)
- federal and foreign income taxes
- Charitable contributions in excess of 10% limit
- net capital loss
- Net LTCG over NSTCL (net of tax)
= adjusted taxable income
- dividends paid during taxable year
- dividends paid within 2.5 months after year end
- dividend carryover
- consent dividends
= undistributed PHC income
X 20%
= Personal Holding Company Tax


For the PHC tax computation, dividends paid within 2.5 months after the close of the year are limited to...

20% dividends actually paid during year


Accumulated Earnings Tax calculation? 14

Taxable Income
+ DRD deduction
+ NOL deduction
- federal and foreign income taxes
- excess charitable contributions (over 10% limit)
- net capital loss
- net LTCG over net STCL (NOT)
= adjusted taxable income
- dividends paid last 9.5 months of tax year and 2.5 months after close
- consent dividends
- accumulated earnings credit
= acc. Taxable income
x 20%
= Acc. Earnings Tax


DRD deduction

Dividends received deduction


What is the AMT formula for individuals? 12 steps

Regular taxable income
+/- Adjustments
+ Tax preferences
= alternative minimum taxable income
- exemption amount
= alternative minimum tax base
X 26% or 28%
= tentative before foreign tax credit
- AMT foreign tax credit
= tentative minimum tax
- regular tax liability - regular foreign tax credit
= AMT (if positive)


Schedule M-2 calculation 6

Balance at beginning of year
+ net income per books
+ other increases
- dividends to shareholders
-other decreases
= balance at end of year


S-Corp stock basis calculation 5

Beginning basis of stock
+ all income items
- withdrawals of assets
+ contributions of money or property
= basis


In an S-corporation's basis calculation, share of all income items includes...

Taxable and nontaxable income


Taxable Gifts Formula. 11 lines

Gross Gifts (cash + FMV of property at date of gift)
+ 50% of spouse's gifts to third parties if gift splitting elected
- 50% gifts to 3rd parties treated given by spouse if gift splitting elected
- annual exclusion ($14,000 per donee)
- unlimited exclusion for tuition and medical
- unlimited exclusion for gifts to political organizations
- charitable gifts
- marital deduction
= taxable gifts for current year
+ taxable gifts for prior years
= total taxable gifts


Charitable gifts in gift tax formula computation are for...

Remainder of charitable gifts after annual exclusion


Estate tax formula 16 lines

Gross estate
- funeral expenses
- administrative expenses
- debts and mortgages
- casualty losses
- state death taxes
- charitable bequests (unlimited)
- marital deduction (unlimited)
= taxable estate
+ post 76 adjusted taxable gifts
= total taxable life and death transfers
+ tax on total transfers
- post 76 gift taxes
- transfer tax credit
- foreign death and prior transfer tax credits
= net estate tax liability


Bankruptcy priority 11

Secured creditors
Administrative costs
Gap Creditors
Wages unpaid
Employee benefits unpaid
Grain producers and Fisherman unpaid
Consumer Deposits
Obligations (bank)

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