cpa stuff

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  1. accumulated earnings tax is generally determiend by IRS on an audit. A corp does not file a form to computer AET
  2. personal holding tax are self assessed and filed on form 1120
  3. promissory note contains a promise and makers promises unconditionally, pay a fixed amount of money, to the order of the payee or bearer, on demand or at a definite time (2 parties)
  4. certificate of deposits is a form of promissory note issued by a bank (2 parties)
  5. a draft contains an unconditional written order, by oner person, to another person, theo pay a fixed amount of money, to a third person who is identified person or to bearer
  6. drawer of draft signs or is identified in a draft as a person
  7. time draft is payabel at a definite time in the future
  8. sight draft is payable on demant
  9. trade acceptance is a tiem draft used by sellers as a means to extend credit to buyers of their good
  10. a check is always a sight draft
  11. negotiable (COUPONS) - certain sum of money, order or bearer, unconditional promise to pay, payment in money, on demand or a specific time, signed by creator
  12. an item is not negotiable if the prmoise or orders states and express condition of payment, subject to or governed by another writing, rights/obligations related to it are contained in another writing
  13. "payable to p. Cruz" or "pay to op. cruz only" rendersan order insturment nonnegotiable
  14. different ways to attach a security interst include having possession of collateral, has control of collateral, is a registered certifiecated security delivered to secured party
  15. security interests are enforceable if it is authenticated (signed), value has been given, debtor has rights in ther collateral or the power to transfer such rights
  16. material breach can seek remedies
  17. nonmaterial brach can seek damages
  18. boot generally has basis equal to fair market value
  19. corporation files a 1099-dov if paid gross dividends ore more during the calendar year, mad payments of $600 for liqiudation
  20. loss on a sale to a more than 50% shareholder is not recognized (stock owned by related parties is attributable to shareholder), basis for shareholder is FMV
  21. complex trusts can accumulate income, provide for charitable contributions, distribute amounts other than income
  22. grantor trust - grantor is effectively the beneficiary or has conotrl of distributions
  23. income in repscet to decents receivd by trust or estate is fiduciary income
  24. estate can adopt anyt tax year
  25. after 30 days can repurcahse sold stock
  26. holder in due course takes a negotiable instrument free of personal defenses
  27. joint venture is 2 or more owners to perform a certain activity
  28. corp cannot record a loss for nonliquidating property dividend
  29. room and board do not fall under scholarship money and must be taxed
  30. foreign income tax credit = foreign income/world wibe income X US income tax
  31. charitable deductsion are carryforward for 5 years
  32. joint liablity - payr full share and get reimbursed, severaly liable - pay proportionate share
  33. property distributed for nonliquidating dividend can recognize a gain but not a loss and basis for property is FMV
  34. if lawsuit filed for misstatmenet for a 10k FS then it would most likely be under 1934 act
  35. corp capital loss is back 3 forward 5
  36. new organzaaition expesnes are allocated a minimum of 180 monhts or 15 years
  37. charitable contribution for a corp is income before charitable contribution and dividned received deductions
  38. loss from nonbusiness bad debt is treated as short term loss
  39. basis for property received for non-liquidating is FMV unless a loss, taxalbe is FMV less liability assumed
  40. corp current earinigs and profit are equal to prior + gain - FMV of property + liabiltiy assumed
  41. realized gain is FMV-basis and recognized is boot
  42. gain for transferred property for corp is lesser of boot or gain of FMV when boot is received
  43. gain is also recognized if liablity assumed is more than basis
  44. stock redemtption is disproportionate if owns less than 50% of voting poer and 80% of interest
  45. income is not included on a final tax payer return if on a cash basis and not recevied yet
  46. certain employee trusts lose exempt status if lending without adequate security, paying unreasoanlb compenstaion for personal services
  47. SEC requirements are a must for companies with 500 or more shareholders and 10 M in ASSETS
  48. property for debtors bankruptcy are received 180 after proceedings'
  49. a draft has no primary liability until accpetance by drawee
  50. risk is transferred for sale of goods when FOB shipped under article 2 of the UCC
  51. 14,425 is maount must have for unsecured creditsrs to file bankruptcy
  52. operating loss is carryback 2 years and forward 20 years
  53. partnership distribution in property is basis
  54. deciency judgement can by filed against a debtor if propety sold is less than amaount due
  55. employee awards are 400 or 1600 under qualified plans if for years fo sevice. Go off of basis
  56. income forecast method is the depr method for intellecutla properpty
  57. sec 1231 gains and losses are netted at the partnership level
  58. intercompany property sales are counted as ordinary income when finally sold to an outsider
  59. appraisals for casualty loss
  60. dividends from foreign corps are eligible for for DRD if the corpoation is subject to US income tax
  61. only exeptm trusts and wholly charitable trustrs are excempt from calendar year rule
  62. unrealized accounts receviable will count as ordinary income when selling a partnership interest
  63. generation skipping tax is imposed as a separate tax in addition to the gift and estate tax
  64. there error for 10b5 is the defendant’s intent to deceive, manipulate, or defraud
  65. parnters basis of nonliquidating is basis received from partnership (IE. Only had 3K for basis after cash distribution then property is valued at 3K
  66. prepaid for customer are prorated over course of prepayment
  67. I fcorp has E&P but a loss for year and a distrubiton must allocate the lost for the time period covered by distribution to determing what is taxable
  68. for an electing large corp does not seperatly state charitable contributions
  69. interest is not charged if paid wihtin 10 days of 21 days if amount is under 100K
  70. earned income credit is a refundable credit for low income taxpayers
  71. charity costs is taxable income less charitbale contributions DRD, NOL carrybakc and capital loss carryback
  72. DRD is less of 80% of dividend income or 80% ot taxalbe income without dividedn dedcution, does not apply if there is a NOL or DRD takes corp to NOL
  73. capital gain net income adds short term and long term capitals, net capital gain is the excee of long term cpaital gains over the short term capital losses and does not include short term capital losses
  74. real estate professional to ap erson spedning 50% or more of time in real estate and more than 750 hours of service in rental property trades
  75. personal service corps or those involving confidential relationships are not assignabl
  76. an accuracy related penalyu can be assess by IRS if understatemetn of tax liabitliy is larger than 10% of 5000
  77. stat up costs must occure before business starts operation
  78. recorded mortgages have priority over mechanic liens, mechanic liens typicall start when work begins
  79. if payment is made but no filing was made have 2 years from payment to file
  80. amt credit carried forward indefinently
  81. DRD is included in NOL
  82. robinson patman only applied to interestate
  83. calculate net income from self employment by revenues less expenses, net earnings is net income minus employer taxes for FICA
  84. earned income credit is qualifying child or meets (have principal place for more than hald the year, at least 25 and not over 64, cant be claimed as depended
  85. powers of trustee include 1. Collect property,, 2. Account for property,, 3. Perform investigations,, 4. Set aside fraudulent conveyances and preferential transfers,, 5. Void certain liens,, 6. Operate the debtor’s business,, 7. Hire professionals,, 8. File reports, and, 9. Close the estate.
  86. property that is inherited is FMV at date of death or alt valuation
  87. property that is gifted is at carryover for gain and and for loss is lower of basis or FMV
  88. quitclaim deed - as is
  89. grant deed - doen nothing to create impariment of title
  90. warranty/general deed - guaranteed full rights of use and no undisclosed claims
  91. priority of claims for a bankruptcy - domesitc obligations, admin expenses, claims from ordinary course of buseinss, up to 11,725 for wages withint 180 days, employee beenfit plans, depositors of money for purchase of undeliverd goods, tax calims by govt, intaxicated auto claims
  92. residentail rental property is 27.5 years @ S/L and mid monht convetion
  93. business and investment property is 39 years @ S/L and mid monht convetion
  94. tangible property (1245) - can use double declining, S/L, or 150 DD, half year convention or mid quarter convetions if 405 in final 3 monhts
  95. notes - promise to pay and has tow parties (certificate of deposits
  96. draft - order to pay and has three parties (check, trade acceptance)
  97. intangibles are 15 years amortized
  98. special endorcement - names next payee, blank endorsement - signs but does not designate next payee, qualified endorsement - "without recourse", restrictive endoresment - writes conditions (for deposit only, for collection only)
  99. rights of orignail payee and holder(original designator) are subject to real and persoanl defenses against payment, holder in due course is sucject to real defences but not personal defense
  100. real defense (FABLE) - forgery, alteration, bakruptcy, lack of capacity, execution fraud/extreme duress
  101. personal defecnse - (BUILD) - breach of contract, unauthorized ciompletion, inducement in fraud, lack of consideration, duress
  102. voidable - duress, undue influence, misrepresentation, mistake, capacityy
  103. void - extreme duress, fraud in execution, illegal subject matter, incompetent persons
  104. exrepss contract - terms specifically stated, implied - some of all terms are inferred, executed contract - temrs fully performed, executory contract - terms hace not been fully performed by both parties, unilateral - one party promises to perform, bilateral - each party exchanges promises
  105. negligences deals with forseen parties (forseeable is party could reasonably would forsee and recevie FS (used in fraud))
  106. 1933 act - suffered loss, materali misstatmenet
  107. 1934 act - reckless or intentional misconduct
  108. damages = compensatory - direct losses, consequential - indirect costs & antipicated losses, nominal - no real provable loss, punitive - punish, specific, unique property
  109. implied warranty of merchantability - seller warrants goods are in fiar condition for their ordinary purpose and conrmf to all packacge claimse (seller must be a merchanty)
  110. implied warranty of fitness - relying on sellers judgment in selecting the prodcut
  111. strict lialbity must prove - suffered an injury, seller in the business of sellgin good, product sold in defective condition, defect made the product unreasonably dangerous
  112. strict liability seller liable regardless - unaware of defect, injured party did not exercise due care, not in privity
  113. effective tax rate - rate that person actually pays (taxes paid / income)
  114. marginal tax rate - tax bracket person resides in
  115. basis for likekind exchange is basais for new item
  116. likekind exchanges do not record a gain but can record a loss
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