Stock Options
Schedule K-1/ State
Schedule D
Frontload
Foreign Trusts
Foreign Corporation
PFICs
Renunciation/ Dual Status
1
First taxable event for RSU
Vesting/ Vest Date
1
Give at least 3 types of income that can be found on a Schedule K-1.
Business Income, Interest, Dividends, Rental Income, Royalties, Capital Gains
1
What is the capital loss deduction limit for:
a. MFJ, Single, and HoH filers
b. MFS filers
MFJ, Single, and HoH filers - $3,000
MFS filers - $1,500
1
Double Jeopardy!
What do you call this worksheet?
Frontload Checklist
1
Double Jeopardy!
Enumerate the three parties involved in a trust arrangement.
Grantor/Owner, Trustee, Beneficiary
1
When is the due date of filing of Form 5471?
Attach to the Federal Tax Return on April 15 (including extensions).
1
Name the 3 common methods of PFIC reporting?
Excess Distribution, Mark to Market, and Qualified Electing Fund (QEF)
1
This form is the Initial and Annual Expatriation Statement.
Form 8854
2
Dividends from Unvested Restricted Stocks are reported as ______________.
Additional Compensation
2
Double Jeopardy!
This is a legal concept that can be described as the location to which the taxpayer intends to return on a permanent basis.
Domicile
2
Double Jeopardy!
The following are considered as taxable events in virtual currencies except:
a. Selling cryptocurrency for fiat currency
b. Spending cryptocurrency on goods or services
c. Transferring a digital asset from one wallet to another
d. Trading or converting cryptocurrency for another cryptocurrency
c. Transferring a digital asset from one wallet to another
2
How many complexity categories do we have to classify projects?
Four (Easy, Moderate, Intricate, Difficult)
2
True or False: Income of UK foreign grantor trusts always have to be reported in the owner's Form 1040.
False
2
Marie is filing a category 5 Form 5471, what other form does Marie must file to report her foreign corporation as a qualified business unit?
Form 8858
2
What's the applicable federal tax rate for Excess Distributions allocated to prior years?
Highest Marginal Tax Rate
2
To be considered a Covered Expatriate, the net assets should be ____________.
More than USD 2 million
3
What is the holding period requirement for statutory stock options?
· You satisfy the holding period requirement if you do not sell the stock until the end of the later of:
o 1-year period after the stock was exercised or
o 2-year period after the option was granted
3
What are the 3 passthrough entities that files Schedule K-1?
US partnership, S-Corporations, Estates/Trust
3
Give one reason for you to meet the requirements for a partial exclusion of gain on sale of home.
Work-related Move, Health-related Move, or an Unforeseeable Event
3
FBAR with 9 accounts, what is the complexity?
Intricate
3
True or False: Forms 3520 and 3520-A are always required for TFSA.
False
3
ABC Corporation holds 100% ownership in XYZ Corporation. ABC Corporation does not produce any goods or services or conduct business operations of its own while XYZ Corporation conducts manufacturing business. Which of these corporations can file dormant Form 5471?
None
3
Double Jeopardy!
Meredith is a US citizen, married to Derek, an Australian citizen. They are both living in Australia. Derek opened a securities account with Commonwealth Securities through which he acquired non-US ETF and stapled securities. As of the end of the Australian fiscal year, the value of the
Commonwealth Securities account is $25,001. Considering constructive ownership rules, is Meredith required to file Form 8621?
No
3
Double Jeopardy!
For the SPT Look back rule to apply, at least how many days during the current year should a person stay in the US?
31 days
4
Double Jeopardy!
How much income is reported in 2022?
Compensation of $24,698.48.
4
Nonresidents are taxed only on their state sourced income. What are the 4 most common types of state sourced income.
Wages from Form W-2, Capital Gains from Sale of Rental Property, Rental Income, K-1 Income.
4
Taxpayer paid off a mortgage when he sold his property. How much is the foreign mortgage settlement gain or loss to be reported on his US ITR?
Zero
4
What is the complexity category of a project with ownership in a Controlled Foreign Corporation?
Difficult
4
What is the Form used to file an extension for 3520-A?
Form 7004
4
Double Jeopardy!
Sec 965 requires United States shareholders to pay a tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States. Sec 965 tax is also known as?
Transition Tax
4
Under mark to market method, what type(s) of income item(s) is/are recognized? Specify the forms and schedules where the income items flow. Assume that there was no actual sale.
Form 1040 Schedule B, non-qualified dividends
Form 1040 Schedule 1 (from Form 8621), other income
4
A long-term resident is a US green card holder in at least ___ of the last 15 tax years ending with the year he/she abandons his/her green card.
8
5
Incentive Stock Options (ISO)
- Number of shares: 100
- Grant Price/Strike Price: 01 January 2021 @ $20
- FMV on Exercise: 01 June 2021 @ $45
- Sale: 02 June 2022 @ $85
Is it a qualifying sale?
No. Less than 2 years after the option was granted.
5
Give at least 4 US states that do not impose an income tax.
AL, FL, NV, SD, TX, WA, WY, TN, NH
5
Taxpayer owned and resided in his main home from 2019. He sold the property in 2022. How much is the reportable gain or loss on sale of home?
- Purchase Price: $377,500
- Sale Price: $350,000
- Selling Expenses: $8,225
Zero (Sale of Home Exclusion)
5
In what section do we include PBC documents related to all years but the current year we are preparing for in the working paper file?
Unused Section
5
What is the Revenue Procedure that exempts certain tax-favored foreign retirement trusts from filing of 3520 and 3520-A?
Rev Proc 2020-17
5
ABC Corporation had the following equity structure during 2022. There were no changes in the share ownership during the year. Determine Gerry's filing category(ies).
Category 1, 4 and 5
5
Acquired on 13 November 2021
Adjusted basis, 01 January 2022 – $1,500
Sold on 16 October 2022 for $1,000
Unreversed Inclusion balance – $230
Under mark to market, how much gain (loss) should be recognized during the year? Describe how the gain (loss) should be reported on Form 1040.
Other Income, $230 loss
ST Capital Loss $270
5
Name 5 countries with which the US has an existing Income Tax Treaty.
A
Armenia
Australia
Austria
Azerbaijan
B
Bangladesh
Barbados
Belarus
Belgium
Bulgaria
C
Canada
China
Cyprus
Czech Republic
D
Denmark
E
Egypt
Estonia
F
Finland
France
G
Georgia
Germany
Greece
H
Hungary
I
Iceland
India
Indonesia
Ireland
Israel
Italy
J
Jamaica
Japan
K
Kazakhstan
Korea
Kyrgyzstan
L
Latvia
Lithuania
Luxembourg
M
Malta
Mexico
Moldova
Morocco
N
Netherlands
New Zealand
Norway
P
Pakistan
Philippines
Poland
Portugal
R
Romania
Russia
S
Slovak Republic
Slovenia
South Africa
Spain
Sri Lanka
Sweden
Switzerland
T
Tajikistan
Thailand
Trinidad
Tunisia
Turkey
Turkmenistan
U
Ukraine
Union of Soviet Socialist Republics (USSR)
United Kingdom
United States Model
Uzbekistan
V
Venezuela