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2012 CFP > Taxes > Flashcards

Taxes Flashcards

1
Q

How do Health Savings Account (HSA) contribution impact an individuals tax return?

A

It is an “above-the-line” deduction unless it is made through the employer’s cafeteria plan.

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2
Q

What are the 2012 standard mileage rates?

A
  • $0.555 for business use
  • $0.14 for charity use
  • $0.23 for medical or moving use
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3
Q

What is the 2012 FUTA rate?

A

6% of the 1st 7k of income

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4
Q

Is unemployment income taxable?

A

It is considered repayment of lost wages so will be taxed as income.

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5
Q

What are the 2012 income limits that affect how social security income is taxed (and what are the rates)?

A

50% 85%
Single: 25k 34k
Joint: 32k 44k

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6
Q

For 2012, how is the social security benefit reduced due to other income?

A

Prior to full retirement age (FRA), benefit is reduced $1 for every $2 of income over $14,640.

In year of FRA, reduction is $1 for every $3 of income over $38,880.

No reduction after FRA.

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7
Q

How many years are subject to the”second disposition” rule?

A

2

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8
Q

What are the steps of a recapitalization freeze transaction? (2)

A

1) change from single owner type entity to multiple owner type
2) create different ownership interests in the company

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9
Q

2012 exemption amount

A

$3800

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10
Q

Exclusion or above the line items

A 
Inheritance
Gifts rcvd
Muni interest
Workers comp
HSA controls
Alimony paid
IRA contributions
Student loan interest
Tuition
1/2 of self employment
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11
Q

IRA phase out for 2012

A

58-68k single
92-112k JNT

Note: active stratus with ER plan changes JNT to 173-183k

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12
Q

Roth phase out for 2012

A

110-125k SGL

173-183k JNT

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13
Q

Student loan interest phase out (2500)

A

60-75k SGL

125-155k JNT

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14
Q

4 classifications of property

A

1) realty
2) personalty
3) tangible
4) intangible

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15
Q

Property uses wrt taxes

A

1) trade or business
2) production of income
3) inventory (no depreciation)
4) personal use

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16
Q

5 year property

A

ACC

Auto
Computer
Copiers

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17
Q

7 year property

A

Furniture

Equipment

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18
Q

15 year property

A

Landscape improvements like fences, sidewalks, driveways

19
Q

Realty depreciation

A

27.5 y residential

39 y commercial

20
Q

S179 effect on basis

A

Reduces basis. Must be adjusted PRIOR to calculating 1st year depreciation

21
Q

S179 max & phaseout for 2012

A

139k or taxable income which ever is least

Phase out $560k

22
Q

S1245 recapture

A

Personalty prop

23
Q

S1250 recapture

A

Realty depreciation

24
Q

Look back rules in S1231

A

If 1231 gain in current year…must be recharacterized by previous years 1231 losses (which will be treated as OI)

25
Q

S1250 gains taxed at what rate

A

25%

26
Q

S1245 gains taxed at what rate?

A

Ordinary income

27
Q

Excluded items for s1031

A

Stocks and bonds
Livestock of different sexes
Inventory

28
Q

Is s1031 boot taxable?

A

Yes

29
Q

S121 exclusion

A

SGL 250k
JNT 500k

Cap gain exclusion on sale of primary residence

30
Q

S121 requirements

A

1) Principal residence in 2 of prior 5 years
2) once every 2 years
3) partial exclusion for health, job, or unforeseen stuff

31
Q

Income limitation to casualty & theft loss reduced by

A

Lesser of FMV or adj basis

  • Insurance
  • 10% AGI
  • $100 floor per loss
32
Q

1244 allows

A

Up to 100k (jnt return) to be treated as ordinary loss. Overage is a capital loss.

33
Q

Above the line adjustments

A 
IRA
Alimony
Interest forfeitures
Half self employment tax
Student loan interest
34
Q

Itemized deductions

A 
Home mortgage interest
Prop taxes
Medical expenses 
State and local taxes
Investment interest expense
Charitable contributions
Casualty & theft losses
Misc
Tier II misc
35
Q

Tax credits

A 
Dependent care
Child tax credit
Elderly disabled
Foreign tax
General business
Education
36
Q

Professional service corporations

A

Call AAA for HELP

Accounting
Actuarial
Architecture

Health
Engineering
Legal
Performers

37
Q

PSC tax rates

A

Flat 35%

38
Q

Business accumulated earning tax penalty

A

15% on amount over 250k that doesn’t have a valid business purpose

39
Q

Negligence penalty (accuracy mistakes)

A

20% of the underpayment

40
Q

Civil fraud penalty

A

75% of underpayment

41
Q

Failure to file penalty

A

5% of due taxes PER MONTH capped at 25%

42
Q

Failure to pay penalty

A

1/2% of taxes due PER MONTH capped at 25%

43
Q

Estimated taxes

A

If under 150k, lesser of

90% of current year’s taxes
OR
110% of previous year’s taxes

You can choose either if over 150k

44
Q

Who files and what are the exceptions

A

Don’t file if income is less than standard deduction plus exceptions

UNLESS

1) >$400 self employment income
2) =>$110 if church income (if it doesn’t pay SS)
3) rcv’d advance income credit from ER

2012 CFP (7 decks)

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