Flashcards in Taxes: Gross Income - Other Inclusions Deck (7)
Loading flashcards...
1
Taxes:
Gross Income - Other Inclusions
Tips
Tips
- must be reported in TI
- reported to employer by 10th day of following month if greater than $20 per month
2
Taxes:
Gross Income - Other Inclusions
Alimony
Alimony
- taxed to recipient
- payor deducts
Requirements
- required by decree or written agreement
- made in cash
- paid to former spouse
- terminate upon death
- payor and payee cannot be members of same household
Property Transfers to former spouse
- not taxable event
- get transferors basis
3
Taxes:
Gross Income - Other Inclusions
Alimony
Recapture
Special Rules
- if payments decline more than $15,000 (limit 1) after first 3 years of divorce
A. subtract (year 2 - year 3) - $15k (limit 1)
B. Reduce year 2 by A
C. add reduced year 2 to year 3 and divide by 2= limit 2
D. excess of year 3 over limit 2 - $15k
E. add A & D
4
Taxes:
Gross Income - Other Inclusions
Child Support
Child Support
- not taxable to recipient and not deductible by payor
Required Amount Not Received
- satisfy child support first
5
Taxes:
Gross Income - Other Inclusions
Damages
Damages
- physical injury or illness are not taxable
- worker's compensation is not taxable
- if emotional distress, employment or age discrimination, or injury to reputation, must be included in gross income
- punitive damages: must be included in gross income
- include attorneys fees if recovery included in income
6
Taxes:
Gross Income - Other Inclusions
Annuities
Annuities
- basis is amount paid for insurance plan
- annuity funded through retirement plan, basis is only after-tax contributions
- no basis for tax-deductible contributions or employer contributions
7
