Reg Becker 1

  1. ´╗┐what is the general rule of when a person has to file a 1040
    • equal to or greater than:
    • personal exemption, plus
    • regular standard deduction
    • B1-7
  2. when would a person have to file a 1040 if they are under the general rule for filing
    • self employment income of $400, or
    • individuals who can be claimed as a dependent, have unearned income, and gross income of $1K
    • individuals who received advanced payments of earned income credit
    • B1-7
  3. what is a dependent in regards to filing status of qualifying widow with dependent child and how long do you have to have the dependent
    • son, stepson, daughter, or stepdaughter
    • must live with for whole year
    • B1-8
  4. who does not qualify as a dependent for filing status head of household and how long must a dependent live with you for the filing status
    • cousins cannot be a dependent
    • must live with for more than half the year
    • B1-9
  5. how can a married couple claim an exemption if married filing separately
    • taxpayers spouse has no income, and
    • cannot be claimed as a dependent of another taxpayer
    • B1-10
  6. what is the phase-out for personal exemption
    • 2% for every $2.5K of which gross income exceeds:
    • 300K for married
    • 250K for single
    • B1-11
  7. what are the requirements to get an exemption from a qualifying child
    • CARES
    • close relative
    • age limit (19 or 24 if full time)
    • residency and filing requirements
    • eliminate gross income test
    • support test changes
  8. what are the requirements to get an exemption from a qualifying relative
    • SUPORT
    • support of over 50% or 10% if multiply support agreement
    • under a specific amount of taxable gross income (3,900)
    • precludes dependent filing a joint return test
    • only citizen test (US/Canada/Mexico)
    • relative test or Taxpayer lives with individual for whole year
    • B1-11
  9. what is considered nontaxable income for exemption from a qualifying relative
    • social security
    • tax exempt interest income
    • tax exempt scholarships
    • B1-13
  10. what is the difference between realization and recognition
    • realization - accrual or receipts of cash, property, or services
    • recognition - realized gain is included on tax return
    • R1-15
  11. when given property for income what value is given to property
    • FMV
    • R1-17
  12. what two fringe benefits are not taxable
    • general health
    • retirement
    • R1-18
  13. how much can be excluded from gross income for payments made by employer on behalf of employees educational expenses
    • 5,250
    • R1-19
  14. when would employer discounts on merchandise be included in gross income
    • employers gross profit percentage (paid less COGS and if negative is taxable)
    • R1-19
  15. what interest is tax exempt
    • state and local government bonds (muni)
    • bonds of a US possession
    • Series EE (education bonds)
    • R1-22
  16. how long does a stock have to be held for to have dividends qualify for lower tax rate
    • held for more than 60 days
    • R1-23
  17. what are tax rates for dividends
    • 0% - if tax bracket is 10% - 15%
    • 15% - most tax payers
    • 20% - if tax bracket is 39.6%
    • R1-24
  18. what are the different types of tax free distributions
    • return of capital
    • stock split
    • stock dividend
    • life insurance dividend
    • R1-24
  19. unearned income is taxed at the Medicare rate of what percent
    • 3.8%
    • R1-24
  20. when would state and local tax refunds be taxable
    • it the tax refund was itemized in the prior year
    • R1-25
  21. what expenses are not deductible on schedule C
    • salaries paid to the sole proprietor
    • federal income tax
    • personal expenses
    • bad debt for cash basis
    • charitable contributions
    • R1-28
  22. what is the carry forward for net income loss
    • 2 year carryback
    • 20 year carry forward
    • R1-29
  23. what is the FICA tax rate
    • Medicare - 1.45%
    • SS - 7.65% up to 113,700
    • R1-29
  24. what types of property do the uniform capitalization rules apply to:
    • production for use (fixed assets)
    • produced for sale (inventory of manufacturing firm)
    • acquired for resale(inventory of merchant)
    • R1-30
  25. When would property acquired for resale not be included in the uniform capitalization rules
    • taxpayers average gross receipts for the 3 preceding tax years do not exceed $10M
    • R1-30
  26. what costs cannot be capitalized
    • RAMS
    • research
    • advertising
    • marketing
    • selling
    • R1-30
  27. what construction contracts do not have to convert to long-term construction contracts
    • small contractors & home construction contractors
    • R1-31
  28. what are exceptions to the penalty tax for IRA early withdraw
    • HIM DEAD
    • home buyer (up to 10K)
    • insurance (medical)
    • medical expenses in excess of 10% AGI
    • disability (permanent or indefinite, but not temporary)
    • education (tuition, books, etc.)
    • and
    • death
    • R1-39
  29. how much rental income can be deducted for active rentals
    • $25K with phase-out from 100-150K
    • R1-43
  30. what value is given to prized and awards for taxable income
    • FMV
    • R1-45
  31. when is an nonqualified employee stock option taxed
    • nonqualified is taxed when granted if the option has a ascertainable value otherwise taxed when exercised.
    • R1-47
Card Set
Reg Becker 1
Reg Becker 1