gleim final

• taxable income
• + tax preference
• + personal exemption
• + standard deduction if not itemized
• +- certain other adjustments
• = Alternative minimum taxable income
• - exemption amount
• =alternative minimum base
• X rate
• = tentative minimum tax
• - regular income tax
• =AMT

rate = AMT Base (first 179,500 X 36%) and excess 28%

• MFJ -80,800 (phaseoue .25 per 1 over 153,900
• singler - 51,900 (phaseout .25 per 1 over 115,400

• taxable income
• + tax preference
• +- adjustments
• =gross tentative AMTI
• +- ACE adjustment
• -AMT NOL deduction
• = Alternative minimum taxable income
• - exemption amount
• =alternative minimum base
• X rate
• -foreign tax credit
• = tentative minimum tax
• - regular income tax

• private activity bond interest - expenses to earning it (add back)
• percentage depletion - any excee of dedcution calimed over adjusted basis
• intangible drilling costs - add ane excess amortized over 10 years over 65% of net income from oil, gas, geothermal properties

• accelerated depreciation - MACRS to 150% declingin for personal property and real property is S/L @ 40 years and mid-month
• installmenet sales - add any balance of current year gain (on disposition of stock) minus gain recognized under the installment method
• long-term contracts - convert to percentage of completion method
• subtract all amounts added to taxable income as a tax preference to the extent they increased the regular tax net operating loss
• distributions from a trust or estate

• ACE
• -tentative AMTI (figure out in another question)
• = Difference
• X .75

• organizational expendures amortized and deducted
• 70% DRD attributable to <20% owned corps
• life insurance proceeds on a corporate officer are added
• installment method on nondealer is disregarded unless interest is paid
• LIFO recapturefor excess of FIFO valuation over LIFO
• deprecaiton is combied using the alternative depreciation system

• add ace adjustment if ACE>AMTI
• subtract ace adjustment if ACE

40,000 - ((AMTI - 150,000) X .25)

• lower if foreign tax credit or
• 90% of gross tentative AMT computed before ant AMT NOL deduction and foreign tax credit

20%

• has average gross receipts fo 5M or less for first 3 years
• has average gross receipts of 7.5M or less for prior 3 years

• 25% of tax liablity
• annualization method

forward indefinenttly

Not essentially equivalent to a dividend means that there is a meaningful reduction in the shareholder’s proportionate interest in the corporation. Reduction in voting power is generally required.

• aacumulated adjustment account (AAA)
• previosuly taxed income (PTI)
• accumulated earnings and profits (AE&P)
• other adjsutment account (OAA)
• stock basis

ways and means committee (house) > finance committee (senate) > if revisions then joint committee which goes back to house and senate > president

private letter ruling, TAM>Revenue ruling, Revenue procedure >US tax district and federal claims court > treasury regulation, appellate court opinion > IRC, US supreme court > US constitution

official interpretation of internal revenue law as applied to a given set of faces and is intended to promote uniform application of tax laws by IRS employees

internal revenue bulletins

interpretation of internal revenue law as applied to a given set of facts (admin and procedural matters)

authoritative instrument of the commissioner of internal revenue for announcing official IRS rulings and procedures

explain the law in plain language and their advisors

requested by IRS area officers after a return has been filed in conjunction with an ongoing examination

• timing - accelerates or defers recognition of income and/or deductions
• shifting - moving income from one family member to another or jurisdiction to another
• conversion - converting income form a less favorable category to a more favorable one

corp incorporated in strict compliance with the applicable state statue

• statue under which the business could have incorporated
• good faith but unsuccessful attempt to comply with it and
• objective evidence that indicates an actual or attempted exercise of corporate power

a principal may be liable for the agents torts but the wrongs must be committed within the scope of the agency

A quasi-public corporation is privately formed and for-profit. However, it is often heavily regulated because of its substantial effect on the public interest and its special privileges.

person hols himself out as an agent and the alleged principal knows (or should have known) of the represetnation and fails to make an effective denial

• general - authorizes agent to do anyhting that may be necessary to transact the principles legal affairs
• special - authority for only specific transactions
• durable - effective during a specific period of incapacity of the principal

• general - perfom all acts relevant to the purpose for which they are engaged
• universal - conduct principals business for which they can legally delgate
• special - particular transaction
• del credere - guarantees obligations of a third party to the principal

promise is given that the promisor should resasonable expect to induce action byt the promisee

contract implied by law that makes no promises and reach no agreemetn however one of the parties is substantially benefited at the expense of the ther party

a weaker party only choice is to accept the terms impoaed by the stronger party or forgo the transaction entirely (rental agreement)

relates to inscupulous or unreasonable activity and the contract lacks fundamental fairness

contractual terms that excuse one pary from liability for injury or damae caused by his acts

arises from gross negligence and a misrepresentation may bt made with a willful and reckless disregard for its truth or falsity rather than actual intent to deceive

occurs when defrauded party is aware of entering into a contract and intends to do so however they are deceived about a material fact

occurs when the signature of a party is obtained by a fraudulent misrepresentaiton that directly relates to the signing of a contract

• fraud in inducement
• negligent misrepresentation
• innocenent misrepresentiation
• mutaul mistake of fact
• duress - threat
• undue influence

• fraud in execution
• duress - physical force

• possession - goods, negotialbe documents, tangible chattel paper, instruments money
• control - investmnet property, electronic chattel paper, deposit accounts, registered security

• fee simple - totality of ownership rights recognized by law because it includes the rights of possession, exploitation, and full ownership for life or in perpetuity
• restrive convenant - promise included in an agreement that limits the use of real property or the building that may be erected on it. The promise is usually included in a deed.
• license - revocable personal privilege that permits one party to enter and make some use of land in possession of another without being considered a trespasser. A license is informal. It is personal to the licensee and therefore not assignable.
• easement - right of one person to legal entry onto, and limited use of, the land of another.

contains a promise that the maker promises unconditionally to pay a fixed amount of money, to the order of the payee or bearer on demand at a definite time

draft contains an order to an unconditional writtedn order by oner person (the drawer) to another person (drawee) to pay a fixed amount of money to a third person either identified or bearer

• time - payable at definite time in the future
• sight draft - payable on demand (upon presentiaton to the drawee

time draft used by sellers as a means to extend credit to buyers of their goods

• time draft - when postdated
• sight draft - checks written other than postated

• blank - identifies no particular payee
• special - specifies person instrument is payable to (pay to, pay to order)
• restrictive - restricts instrument even furhter (deposit only)
• conditional - subjects endorsee to happning or nonhappening of a specified event
• qualified - disclaims or limits contractual liability on instrument (without recourse)

• real defense (FABLE) -
• forgery
• alteration
• bankruptcy
• , lack of capacity,
• execution fraud/extreme duress

• personal defense - (BUILD) -
• breach of contract,
• unauthorized completion,
• inducement in fraud
• lack of consideration,
• duress

Realized gain is:

• Cash received
• +Stock equity received
• +Liability relief
• -AB of contributed property
• -Cash contributed

basis - liability assumed - boot received - gain recognized