Taxation- REG CPA Exam and verified answer graded A+
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Course
Taxation- REG CPA
Institution
Taxation- REG CPA
FOR" AGI include: - - business expenses
- rental and royalty activity expenses
- alimony payments (by payor)
- 1/2 of self employment taxes by self employed taxpayer
- 100% of medical insurance premiums by a self employed taxpayer for taxpayers who are not eligible
for employee subsidized heal...
5 year PERSONALTY assets - ✔✔Cars, computers, copiers, office equipment, rental appliances and
furniture
7 year REALTY assets - ✔✔Office furniture and fixtures and agricultural and other machinery
,Accountable Plan - ✔✔if employee business expenses under an accountable plan is reimbursed -- NOT
TAXABLE as long as all expense are proven by receipt or some other form of evidence and excess
reimbursements are returned to employer from employee
Accountant Duties - ✔✔- Act in a nonnegligent manner
- Not entitled to find fraud (unless stated in agreement or a normal accountant would have found them)
Accountant- Client Testimonial Privilege - ✔✔belongs to client, client can waive, must waive all or
nothing, only applies in STATE court
Additional 3.8% tax - ✔✔If modified AGI exceeds:
single - 200,000
married - 250,000
the 3.8% tax is applied to lower of:
1) amount income exceeds threshold
2) net investment income
Adjusted Basis - ✔✔Cost of property + capital improvements - depreciation + costs with acquisition
Adoption Expenses - ✔✔NOT TAXABLE up to $13,190 and phased out
Advocacy - SSTS No. 1 - ✔✔practitioners recommending tax positions have the 'right and responsibility'
to advocate for their taxpayer clients if claimed position meets standards
AICPA tax standards (if no federal tax matter regulation applies) - ✔✔Next in line
- a tax position can be taken if there is a realistic possibility (at least 33%) that position will be sustained
- even if not a realistic possibility can still take tax position if there is a reasonable basis (20-33%) that
position will be sustained AND it is disclosed to IRS
, Alimony - ✔✔TAXABLE to recipient and DEDUCTIBLE for payor (FOR AGI)
Must be:
- made in cash and required by written agreement
- terminate upon death of recipient or at certain time
- payor and payee cannot live in same household
Amount Realized - ✔✔Cash received, FMV of Property receive, liabilities assumed by buyers, less selling
expenses
Annuities - ✔✔Each payment is part income and part return of capital
- the amount paid for an annuity is the taxpayer's basis in asset
- basis recovered over life of annuity
Assignment of Income doctrine - ✔✔Income is taxed to the individual who earns the income, even if
taxpayer directs that the funds pay someone else
Basis in new stock from Wash Sales - ✔✔Cost
+ Disallowed Loss
=Basis in new stock
Basis of Like-Kind Property Calculation - ✔✔FMV of property received
- Postponed Gain
+ Postponed Loss
= Basis of Like- Kind Property
Basis of New Property - ✔✔FMV of new property received
- Postponed Gain -------> Realized gain - Recognized Gain
= Basis in New Property
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