Becker 1&2

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Becker 1&2
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2014-04-22 18:19:53
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Becker 1&2
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Becker 1&2
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  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
  32. what are the adjustments to gross income allowed on a 1040
    • A IDIOT SHAMES
    • alimony paid
    • IRA
    • domestic prodcution activity
    • interest withdraw penalty
    • one half self employement FICA
    • tuition and fee deduction
    • student loan interest
    • health savings account
    • attorney fees pain in discrimination & whistle blower
    • moving expenses
    • educator expenses
    • self employement health insurance & retirement
    • R2-1
  33. how much can be deducted for edcuator expenses
    • 250
    • R2-4
  34. how much can you a person deduct from IRA and when can a person not deduct
    • up to $5.5K
    • when AGI is between 59-69K (single) or (95-115K (joint), and
    • a taxpayer or spouse particpates in another qualified plan (if spouse between 178-188K phaseout)
    • R2-5
  35. what is considered compensation for IRA
    • salary
    • wages
    • commissions
    • bonuses, and
    • alimony
    • R2-6
  36. if over 50 years old how much can a person give to IRA
    • $6.5K
    • R2-7
  37. what are phaseout limits for Roth IRA
    • 112-127 MAGI (single)
    • 178-188 MAGI (joint)
    • 0-10 MAGI (Married filing seperatly)
    • R2-7
  38. when can a roth IRA be withdrawn tax free
    • HAD Death
    • Homebuyer is first time (not owned home in 2 years)
    • age 59.5
    • disability
    • death of taxpayer
    • R2-8
  39. what is the allowed deduction for coverdell education savings
    • $2K annually
    • R2-9
  40. what is the time limitation for the coverdell educaiton savings
    • beneficiary reaches 30 years of age, or
    • can be transferred to another family member(including nieice and nephew), if not
    • becomes taxable to beneficiary and assess a 10% penalty
    • R2-9
  41. what is the amount to deduct for studen loan interest
    • $2.5K
    • but may not be claimed as dependent
    • R2-10
  42. what is the amount of deductions for tuition and fees
    • $4K
    • but cannot apply if already used the american opportunites, lifetime learning, or non-taxable education savings
    • R2-11
  43. what are the requirements for moving expenses
    • fifty miles farther from old residence his former princpal place of work
    • stay for 39 weeks or 78 if self-employed
  44. what expenses are reimburseable from moving expenses
    • 24 cents per mile
    • travel and lodging
    • transporting goods to new location
    • R02-12
  45. how much can a person deduct for keogh plan
    • lessor of: $51K or 25% net (Keogh/sefl employmed) earnings
    • R02-13
  46. who much can a person add for keogh plan
    • lessor of: $51K or 100% of net eranings of compensation is less than $51K
    • R02-13
  47. how do you determine the net earnings for a keogh plan
    • Schedule C
    • Less: 1/2 self employment tax
    • less: keogh deductions
    • = keogh net earnings
    • R2-14
  48. what is the standard deduction amount
    • $6.1K single
    • 9K for HOH
    • R2-15
  49. what is the standard deduction amount for a dependent
    • greater of $1K or earned income plus 350
    • R2-17
  50. how much of medical expenses are allowed
    • 10% AGI
    • or 7.5% if 65 and over
    • R2-19
  51. when are points from acquisiton deductable and amortized
    • acquisition indebtedness are deductible
    • refinancing are amortized
    • R2-21
  52. how long can interest expense be carried forward
    • indefinently
    • R2-23
  53. what is the maximum allowabl charitable deduction
    • 50% of AGI for cash
    • 30% of AGI for gifts of long term capital gain
    • R2-24
  54. what is the value for property given as a charitable deduction
    • FMV if held for more than 1 year, or
    • basis if not held for one year
    • R2-24
  55. when are time for services deductable
    • they are not
    • R2-25
  56. what is the carryover for excess charitable deduction
    • five years
    • R2-25
  57. what are the deductable miscellaneous itemized expenses
    • BUSHED BEET U
    • Business gifts ($25)
    • uniforms
    • subscription to professional journals
    • hobby (are not)
    • educational expenses (maintain improve skill or meet job requireements)
    • debit card fees to pay income tax
    • business use of home
    • expenses of investors (safe deposit and investment advice)
    • employment agency fees
    • tax prep fees
    • unreimbursed business expense(
    • travel, meal lodging
    • transportation expense
    • meals/entertainment)
    • R2-28
  58. what other miscellaneous expenses are not subject to 2%
    • gambling losses
    • federal estate tax pain on income in respect to decendent
    • R2-30
  59. what are the refundable personal tax credits
    • child tax credit
    • earned income tax
    • withholding tax
    • excess SS
    • american opportunity credit
    • R2-33
  60. how old does a child have to be to be qualiifed for child and dependent care credit,
    what are elegible expenses,
    what is the maximum %
    how many kids can be qualified
    • under 13
    • babysitter, nursery school, day care
    • 35%
    • up to 2
    • R2-33
  61. what are the credits for american opportunities
    • 100% of first 2000 and 25% of next 2,000
    • and is per student basis
    • R2-36
  62. what are the credits for lifetime learning
    • 20% of first $10K and does nto vary by family
    • R2-37
  63. what is the allowable tax credit for foreign tax
    • lesser of:
    • foreign tax, or
    • taxable income/(taxable income + exemptions) X US tax
    • R2-40
  64. what are the credits for 1040
    • COMMITT
    • charitable contributions
    • other misc
    • misc(2%)
    • medical(10% or 7&
    • interest
    • taxes
    • theft and lossR2-17
  65. how much is the child tax credit
    • $1K per child under the age of 17
    • R2-42
  66. what are the eligibility requirements for the earned income credit
    • live in the US for more than half the year
    • meet earned income thresholds
    • over 25 and less than 65
    • R2-42
  67. what automatically disqualifies a person from earned income creidt
    • interest
    • dividends
    • net rental/royalty income
    • net capital gains,
    • net passive income
    • that are more than $3.3K
    • R2-43
  68. what is the formula for personal AMT
    • taxable income
    • +_ adjustmnets
    • + preferences
    • =AMTI
    • - exemption
    • =AMT Base
    • X Tax computatiom
    • =tentative AMT
    • -tax credits
    • =tentative minimum tax
    • R2-45
  69. what are the adjustments for personal AMT
    • PANIC TIMME
    • Passive activity losses
    • accelerate depreciation
    • net operating loss
    • installment income of a dealer
    • contracts - % of completion
    • interest deductions
    • medicla deductions
    • misc deductions not allowed
    • exemptions (personal) and standard
    • R2-50
  70. when are personal tax estimations not penalized
    • 90% of current years ta, or
    • 100% of PY or 110% if over 150K
    • R2-54
  71. what belief should a tax payer recommend for a tax return position
    • realistic possibility of success
    • R2-57
  72. what is the basis of property that is received by a corp
    • greater or adjusted basis plus gain recognized, or
    • debt assuemd by corp
    • R3-3
  73. when would property contributed to a corp not result in gain/loss
    • if 80% of control oafter transaction, and
    • no booot involved (cash withdrawn or recuepit of debt securities)
    • R3-3
  74. what is an individuals basis for common stock from a corp
    • amount conitributed - cash
    • adjusted bases reduced by debt for property
    • R3-4

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