Final Deck Flashcards by Nathaniel Mountain

Form 8332

Form to release exemption for a child to a non-custodial parent.

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Form 1040X should be filed in how many years to claim a refund on a loss from worthless securities?

7 years

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Which of the following items does not decrease an asset’s basis?

A. A casualty loss.
B. A manufacturer’s rebate.
C. The cost of defending a title to the property.
D. Section 179 deductions.

C. The cost of defending a title to the property.

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How is Deductible Alimony treated?

Is an adjustment to income

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How to treat canceled debt on a recourse loan. (auto loan)

Report a loss: Basis = purchase price of car - FMV of car when repossessed. COD = balance due - FMV of car when repossessed.

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How to report installment sale gain. “Installment Sale Method”

Mario’s gross profit percentage on the sale is 50% ($70,000 ÷ $140,000). He must report as his installment gain this same percentage of each $28,000 payment received ($28,000 × 50% = $14,000).

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Qualified Medicaid Waver Payments 1099-NEC.

Not taxable - reported on SCH C as income and expense. Not required to file.

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How much of the AOTC is refundable?

Up to 40%

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AOTC Phaseout thresholds?

Single: $80k-90k
MFJ: $160k-180k
Must have valid SSN or ITIN at time of filing

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Child and Dependent Care Credit Tests (QWJEP)

Qualified Persons Test (under 13)
Work Related Expenses Test
Joint Return Test
Earned Income Test
Provider ID Test

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JDCARRS - Child Tax Credit Tests

Joint Return Test
Dependency Test
Citizenship Test (SSN only)
Age Test (Under 17)
Relationship Test
Residency Test
Support Test

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Earned Income Tax Credit w/ Qualifying Child (JARR)

Joint Return Test
Age Test (Under 19 or under 24 going to school)
Residency Test
Relationship Test

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Which of the following would not be a part of the computation of alternative minimum tax?

A. Certain state and local taxes
B. Interest on private activity bonds
C. Self-employment tax
D. Depletion

C. Self-employment tax

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AMT “Tax Preference” Items

Depletion
Excess intangible drilling costs
Interest on private activity bonds
Accelerated depreciation on property placed in service before 1987
Exclusion of gain on qualified small business stock (QSBS)

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Section 199A Deduction aka QBI Deduction

20% of qualified business income. Overall limit of 20% of taxable income.
Phaseout MFJ: $383,900 - 483,900
S, HOH, QSS, MFS: $191,950 - 241,950
Only domestic income.

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Calculate the taxable amount of an annuity. Lump sum 150,000. Annuity is $2000 for 120 months.

150,000/240,000=0.625
Excluded amount is 0.625x2000=1250
2000-1250=750
750x12=9000

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Qualified medical expenses for HSA purposes.

Over-the-counter medications,
Dental services,
Menstrual care products.
NO HEALTH CLUB DUES!

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Taxable amounts of settlement from personal injury claim. Medical bills, lost wages, pain and suffering, and interest.

Only the interest is taxable.

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Taxable portion of Social Security income. (85% max).

50% of Social Security income.
Plus all other income, including tax-exempt interest.
Any portion over base amount (up 85%) is taxable.
MFS: 0, or 25k
S, HOH, QSS: 25k
MFJ: 32k

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Qualifying Child Test (CARRS)

Citizenship Test - US citizen, national, or RA
Age Test - Under 19 or 24 with school
Relationship Test - Foster child included
Residency Test - Live more than half year
Support Test - Not provided more than half support.

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Qualifying relative test has an income limit.

Income Test - $5,050

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Is portfolio income considered passive activity?

No. Passive activity is a trade or business you do not materially participate in.
Kinds of income: Passive income, Nonpassive income, and Portfolio income (unearned).

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After receiving insurance after a disaster, how many years does a TP have to file replace their home before required to pay tax on gain? In qualified disaster area. For ordinary reasons. For industry.

4 years.
2 years.
3 years.

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What is the amount of additional Medicare tax?

0.9% on earned income over threshold
MFJ: $250k
MFS:$125k
S, HOH, QSS: $200k

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Retirement Savings Contributions Credit MAGI limits.

S, MFS, QSS: $38,250 HOH: $57,375 MFJ: $76,500

What is the exemption threshold for estates in 2024?

$13,610,000 per individual. 27.22 mil MFJ. An unlimited marital deduction applies to spouses who are US citizens Life insurance proceeds are included in the estate.

Special Rental Loss Allowance for active renters.

25k on Sch E and unused carried forward. 50% for MFS that lives apart all year. 0 for MFS. Offsets non passive income.

What can a nonresident alien deduct on form 1040NR?

State and local income taxes. Charitable contributions in U.S. charities Casualty and theft losses incurred in federal disaster area. Misc itemized deductions. Mortgage interest is not allowed.

NIIT investment income types?

Int, div, cap gains, rent & royalty, non-qual annuities and other passive activities.

Only filing statuses available to nonresident aliens?

QQS, S, MFS

What is form 4029 for ordained ministers?

Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits.

When are fiscal year end trusts 1041 due?

4 months and 15 days following the fiscal year end.

When is form 706 United States estate tax return due?

9 months after the death of the decedent.

What is the max estate tax rate over the exclusion?

40%

What is the income requirement to file a bankruptcy estate return?

$14,600

What is form 1310 used for?

To notify the IRS of the death of a taxpayer and allow someone else to claim the refund.

How many years is the lookback period for the substantial presence test?

3 years.

Nonresident aliens who have income that is not subject to U.S. withholding are required to file an income tax return by: A. April 15. B. October 15. C. March 15. D. June 15.

D. June 15.

Basis of new property in 1031 exchange with boot.

Basis is adjusted bases of the property given up plus the boot you paid.

Requirements to claim Foreign Earned Income Exclusion. (FEIE)

Have foreign earned income. Meet either bona fide residence test or physical presence test. Have a tax home in a foreign country. Make a valid election.

Max student loan interest deduction.

$2,500 - per return, per year Phaseout limits MFJ: 155k-185k S, HOH, QSS: 75k-90k

For the purpose of the Premium Tax Credit, what is "household income?"

Adjusted gross income + excluded foreign income, nontaxable social security benefits, and tax exempt interest. It does not include supplemental social security or any other excluded income.

How do you calculated the Net Investment Income Tax?

3.8% of the lessor of investment income or MAGI that exceeds the threshold. $250k for MFJ or QSS $125k for MFS $200k for all other statuses

Additional standard deduction for blindness or age 65 and over.

$1,950 for S or HOH $1550 for MFJ, QSS, or MFS

Other Dependent Credit

$500 per dependent SSN & ITIN Dependent of any age DNCSS Dependent Test Not eligible for CTC Citizenship test SSN/ITIN Test Support Test

Child Tax Credit Phase-out

200k for S 400k for MFJ Credit decreases by $50 for every $1000 over phase-out. Form 8812

EITC Eligibility Tests for Dependents (JARR)

Relationship Test (no cousins) The age test: (under 19, student under 24 or disabled) The residency test (w/ TP in US more than 50% of year) The joint return test

Residential Clean Energy Credit % of cost and qualifying improvements?

l Clean Energy Credit % of cost and qualifying improvements? 30% of expense and solar panels.

Credit for Foreign Death Taxes

The amount of estate tax due is reduced by certain allowable credits, which includes the credit for foreign death taxes.

Can you claim the Retirement Savings Contribution Credit if you are a full-time student?

After regretting the sale of stock, how long must one wait to repurchase to avoid a wash sale?

31 days.

Can registered domestic partners file MFJ or MFS?

No. Civil unions and domestic partners are not recognized as legal marriages.

For EIC and ACTC, when is the earliest a TP can get a refund?

Feb. 15th

At what age are you required to take minimum distributions from a traditional IRA?

How should hobby income be reported?

As "other income" on Schedule 1.

What is the substantial presence test lookback period. Nonimmigrant alien days in the US. to see if should be nonresident alien.

Days of physical presence in the US. 183 days with a 3 year lookback.

Physical Presence Test (Foreign income exclusion)

Be physically present in a foreign country for 330 days of 12 consecutive months.

Which of the following individuals would NOT be subject to self-employment tax? A. A sole proprietor. B. A general partner in a partnership. C. A nonresident alien with U.S.-source income. D. A statutory nonemployee.

C. A nonresident alien with U.S.-source income.

Is student loan interest deduction an adjustment to income?

Yes.

Is the federal estate tax on income in respect of a decedent claimed as an itemized deduction on Sch A?

Yes.

Are losses reported on Sch SE?

No.

How long do you have to replace a home after receiving insurance from it being destroyed in a federal disaster?

4 years from the end of the tax year in which a gain is realized. Otherwise it's a two year replacement period. Rental property or commercial buildings are allowed a 3 year replacement period.

How are Cap gain dist from a mutual fund reported?

Always long-term.

Phaseout threshold for retirement savings contribution credit 50%

S, MFS, QSS: $38,250 HOH: $57,375 MFJ: $76,500

What is an estate taxed at when the spouse is the beneficiary?

Nothing. There is an unlimited martial deduction when the spouse is a US citizen.

What is the HSA contribution limit for 2024? (employer + employee)

$4,150 for Single Double for family Add $1,000 for over 65

Who can still deduct work-related expenses?

Armed forces reservists. Qualified performing artists. Disabled employees (disabled expenses). Fee-based state and local government officials.

Special rules apply to Section 1244 stocks.

Allow a shareholder to deduct their losses on the stock as an ordinary loss, up to $50,000 (or $100,000 if married filing jointly).

Section 179 can be taken to deduct the entire cost of certain commercial rentals.

Nonresidential roofs. Heating, ventilation, and air-conditioning property; (HVAC systems). Fire protection and alarm systems. Security systems.

What is the maximum amount of income you can exclude from U.S. tax using the Foreign Earned Income Exclusion?

$126,500

Max simplified home office deduction?

$1,500

Can a TP file HOH if they sign a declaration allowing their ex to claim their child as a dependent?

Yes. As long as they are unmarried at the end of the year and keep up more that half the cost of the home which was the main home of their child for more than half the year.

To qualify for the Earned Income Tax Credit, which of the following statements is true?

C. The taxpayer must be a U.S. citizen or legal U.S. resident all year with a Social Security Number that is valid for work purposes.

How much is the taxable gain from a casualty loss replacement, and what is the basis in the new rental property?

Gain is the unspent portion from insurance payment and the basis is the cost of replacement minus the gain not recognized (basis of original asset).

Do you include debts not paid before the decedents death in gross estate?

No, they can be deducted from the gross estate on the estate tax return, however they are not included in gross estate.

Full contribution to Roth IRA phaseout for single TP or MFJ and not lived with spouse all year.

$146,000

Abdullah installed two new energy-efficient exterior doors for $1,000 each, and energy-efficient windows for $2,200. This was done on his main home. What is the maximum energy efficient home improvement credit he can claim in 2024?

Abdullah's expenditures qualify him for a $1,100 credit, calculated as follows: Exterior doors: $500 (30% of costs up to a maximum credit of $250 per door, up to a total of $500) Windows and/or skylights: $600 (30% of costs up to a maximum credit of $600)

Can a noncustodial parents who pay medical expenses for a child after a divorce or separation deduct those expenses on Sch A?

Yes. even though they don't claim the child as a dependent.

Gifts that don't have to be reported.

Tuition or medical expenses paid for someone directly to a school or college[1] or a medical provider (the educational and medical exclusions).

Are tips reported as wages?

Yes.

Can a noncustodial parent claim the Child and Dependent Care Credit?

No.

When can dividends be excluded from reporting on Sch B and be reported directly on form 1040?

When they total under $1,500.

How are sales taxes reported on Sch C?

Sales taxes collected are excluded from gross receipts and deductible expenses.

How are early retirement distributions for disability treated?

As wages.

are J or Q Visa holders exempt from the substantial presence test?

Yes.

MFS capital loss deducted from ordinary income

$1,500

Does signing form 8332 give the child tax credit as well as the right to claim the child as a dependent to the noncustodial parent?

Yes.

Holding period for gifted stock.

The holding period is the giftor's purchase date.

Final Deck Flashcards

(88 cards)