1.

Real property (realty) exemption 1-7

Owned by federalstate and local government & charity
Tax holiday
:
Agricultural use& e.wildlife sanctuaries or conservation easement ()
Homestead or personal residence
65 ages
non-income producing property->income producing

2. Sale tax and use tax 1-9

exercise tax sale tax
use tax: use, consume or store tangible property bought from

3. Gift tax exemption 14000 perlive not dead1-12

Levied on the transferor not transferee
Couples double
The unified transfer tax credit is available for gifts (as well as the estate tax)
The credit for 2016 is $2,125,800 (Covers taxable gifts up to $5,450,000)
There is only one unified transfer tax credit (It applies to both taxable gifts and the
Federal estate tax)

4. The difference between corporation tax and individual tax 1-13

CT: without AGI, personal standard deduction personal and dependency
exemptions. Allowable deduction---business-expense
Corporate Taxable Income = Income Deductions

5. Federal income tax, FICA payroll tax, employers pay 1/2 1-141-16
FICA: + Social+Medicare Employee+Employer
S: $11850, 6.2% Taxmax=$7347
$0~$200,000 ($250,000 joint returns, $125,000 married separate
M return)
1.45%
>200,000 () income- 200,000 2.35%
*18 FICA

6. Penalty 1-23
Failure to file: 5% per month, up to 25% of amount due
Failure to pay: 0.5% per month, up to 25% of amount due
File penalty*= Pay penalty File penalty
Total penalty=F*+ P

7. head of household 3-24

Taxpayer: pay >1/2 cost of home
Dependent: Principal home
Live >0.5 (e.)

Qualifying relative and child

8. what items included in AGI, 3-5, what are deducted from gross
income 3-4
GI- deductions for AGI (3-5)= AGI
Deduction: Municipal st&loc bonds,

10,11. Dependent standard deduction earned income 3-10 Unearned

income

65 or blind

Basic Standard deduction for dependents:

Earned income+$350$1050 $1050
Basic standard deductionEarned income+$350$1050, Earned income
Earned income +$350Basic standard deductionBasic standard deduction
Unearned income: not earned from work. e. from investment, bank interests

12. prepaid cash/accrual 4-11,4-8

Cash exception: (taxable when earned received)
Original Issue Discount (OID) interest
Constructive receipt available
No limitations or restrictions (customer`s accounts fail to pay)
Liabilities
Series E and EE bonds are not subject to the OID rules, but a cash basis taxpayer may
elect to recognize the interest when earned.
Check not cashed until subsequent date, until the date, recognize.
Accrual exception:
Prepaid income (taxable when received earned)
: Contested, (e. contractor not meet the specification), no income
recognized until the claim is settled.
Claim of right doctrine: amounts received to be included in income
even though the amount is in dispute and returned to the payor at a later date
Defer: Advance payment (goods, service)

13. Partnership 4-16

Provide data, report earned money even if not distributed to the partners.

14. advance payment 4-12

15. imputed loan interest/child support( alimony) 4-21,22,23
The reduced amounts (death & child ages>21) = child support
Nondeductible by payor and not taxed to recipient (or child)

16. alimony 4-19,20

Property settlements: not taxable, no recognized gain or loss.
Requirements, front-loading, child support

17. group term insurance 4-28

18. full time student bachelor degree scholarship and fellowship 5-7
Dependency exemption: a qualifying child (support test, taxpayer support 1/2 ,

sch&fell support)
Scholarship: must obtained study and research

19. injured person 5-9,10

Personal injury Compensatory damages (nontaxable) physical!!!
Punitive damages taxable

20. airline benefits

21. manager of a hotel, lodging food 5-13,14
Business premises & convenience, required

22,23,24 3*insurance?
Life insurance proceeds 5-5 (accelerated death benefits-terminal illness)
nontaxable no tax cost&fee, tax
Long term care insurance benefits 5-12
Disability insurance 5-11

25. Investment income 5-29, interest on State and local government

obligation 5-22
26. Property value going up and down, realized 14-3
Not realized gain or loss

27. Adjustment for capital costs 14-4 Adjusted basis

28. Purchase price (bargain purchase?)
FMV Price = GI

29. Deleted stock price

30. Mortgage 14-3
Amount realized

31. FIFO 14-8 Identification problems

32. Gift 14-10 PPT 228,229
Realized gain or loss= Amount realized (sell price) gain/loss basis
Donees gain basis= doners adjusted basis (cost)
Donees loss basis min= doners adjusted basis (cost)
FMV
* gain<0, loss>0, no gain or loss is realized.
depreciation

33. Personal use, loss unrecognized,

Business use, loss recognized
14-17