Reg Flashcards - Chapter 2

Question 1

Chapter 2

Exemption for AMT

Answer 1

Single: $52,800 - (25%(AMTI-117,300))
Joint: $82,100 - (25%(AMTI-156,500))

Question 2

Chapter 2

AMT Adjustments

Answer 2

PANIC TIMME:

1. Passive Activity Losses
2. Accelerated depreciation (post-1986 purchase)
3. NOL of the individual taxpayer
4. Installment income of a dealer
5. Contracts - % completion v. completed contract
6. Tax “deductions”
7. Interest deductions on some home “equity loans”
8. Medical deductions (limited to excess over 10%)
9. Miscellaneous deductions not allowed
10. Exemptions (personal) and standard deductions

Question 3

Chapter 2

AMT Preferences

Answer 3

ALWAYS ADD BACKS

1. Private activity bonds
2. Percentage depletion (the excess over adjusted basis on property)
3. Pre-1987 accelerated depreciation

Question 4

Chapter 2

Prior year AMT Credits

Answer 4

Can be carried forward forever, but can only be applied against regular tax not used against AMT tax

Question 5

Chapter 2

AMT Credits

Answer 5

FACCE:

1. Foreign tax credits
2. Adoption credit
3. Child tax credit
4. Contributions to retirement plan credit
5. Earned income credit

Question 6

Chapter 2

Form 1139

Answer 6

Claim a refund of corporate income tax

Question 7

Chapter 2

Form 1045

Answer 7

Used to request a quick refund of individual income tax due to the carryback of a NOL

Question 8

Chapter 2

Form 843

Answer 8

Used to request a refund of taxes other than income tax

Question 9

Chapter 2

Estimated tax payment requirements

Answer 9

1. $1,000+ tax liability

2. Inadequate tax estimates

Question 10

Chapter 2

Hierarchy of authority in the tax law

Answer 10

1. Internal Revenue Code
2. IRS Regulations
3. Tax Court Decisions
4. IRS Agent REports

Question 11

Chapter 2

Statements on Standards for Tax Services (SSTSs)

Answer 11

1. Tax return positions
2. Answers to questions on returns
3. Certain procedural aspects of preparing returns (no responsibility to verify info)
4. Use of estimates
5. Departure from a position previously concluded (consistency not required)
6. Knowledge of error
7. Form and content of advice to taxpayer