Taxes: Gross Income - Other Inclusions Flashcards Preview

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Flashcards in Taxes: Gross Income - Other Inclusions Deck (7)
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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

Taxes:
Gross Income - Other Inclusions
Jury Duty
Unemployment
State Taxes

Jury Duty
- includible in income
Unemployment
- includible in income state & employer fund
State Taxes
- if they use the standard deduction, not taxable

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