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Flashcards in Taxation Calculations Deck (15):
1

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
= AMTI
- 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)

2

Maximum exemption on corporate AMT?

$40,000

3

What does TMT stand for?

Tentative minimum tax

4

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

5

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

6

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

7

DRD deduction

Dividends received deduction

8

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)

9

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

10

S-Corp stock basis calculation 5

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

11

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

Taxable and nontaxable income

12

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

13

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

Remainder of charitable gifts after annual exclusion

14

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

15

Bankruptcy priority 11

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

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