Chapter 7
This arises from a debtor-creditor relationship relationship based on a valid and enforceable obligation to pay a fixed sum of money, regardless of the parties.
What is a bona fide debt?
The major objective of MACRS is this.
What is to help companies achieve a faster write-off of their capital assets?
A worker may prefer this classification because their work related expenses are deductible for AGI.
What is an independent contractor?
Qualified student loan interest deduction is limited to what amount?
What is $2,500?
This type of loss occurs when a taxpayer's passive activity losses exceed their passive income for the year, and the excess loss is carried forward to future years until it can be offset by passive income or the activity is disposed of.
What is a suspended loss?
The Earned Income Credit is what type of credit?
What is a refundable credit?
What is the NOL carry forward period, beginning in 2021?
What is indefinitely?
Depreciation and amortization are summarized on this form number.
What is Form 4562?
If in doubt, a tax pro can file this form to obtain an advanced ruling to determine if a worker's status is an employee or independent contractor.
What is form SS-8?
This type of account allows individuals to save for medical expenses with contributions that are 100% tax-deductible from their income.
What is a Health Savings Account (HSA)?
This tax provision allows the cost basis of an inherited asset to be adjusted to its fair market value on the date of the previous owner's death, potentially reducing capital gains taxes for the heir.
What is the step-up in basis?
What are 1 year and 20 years?
Hurricane damage to a personal residence in a Federally declared disaster area produces this.
What is a deductible loss?
The maximum Sec. 179 deduction is this number for 2024.
What is $1,220,000?
Name a travel expense that can be claimed in addition to the automatic mileage method?
What is parking or tolls?
A penalty paid for prepaying a mortgage is deductible as this.
What is deductible or mortgage interest?
This tax strategy allows taxpayers to combine multiple business activities into a single activity to meet material participation requirements and manage passive activity losses more effectively.
What is grouping activities due to common ownership?
This credit features a credit of $2000 per child under the age of 17.
What is the child tax credit?
Name one qualified expenditure for research and experiments?
What is plant process costs, Depreciation on a building used for research, or costs of developing a formula?
Name two of the determinants of depreciation for tax purposes.
What is Convention, property recovery class, and/or Cost of asset?
Name one of the factors that is characteristic of independent contractor status.
What is Services performed for multiple parties, fringe benefits are not available, or Form 1099-NEC is received from business customers?
Your client received an insurance payment for medical expenses for the prior year. They want to know if they have to pay taxes on the money they received. You can determine this by asking one question.
What is Did you itemize or claim the standard deduction last year?
This amount represents the total financial stake a taxpayer has in an activity, including cash contributions, property contributions, and certain types of debt for which the taxpayer is personally liable.
What is the at-risk amount?
These are two the two education credits.
John purchased a $100,000 account receivable for $90,000. If he collects $97,000, what are the tax consequences on John's tax return?
What is a $7,000 gain?
On June 1 of last year, Mallory converted a machine from personal use to rental property. On the date of conversion, The machine had a FMV of $90,000. Five years ago she purchased the machine for $120,000. The machine is still encumbered by a $50,000 mortgage. What is the depreciable basis of the machine?
What is $90,000?
Home office expenses cannot generate a loss. Expenses are deducted in what order?
What is
1. Business expenses
2. Interest and taxes
3. Operating expenses of the home
4. Depreciation?
Andrea won a $2,300 jackpot at a casino and doesn't want to pay taxes on the income. Advise her.
She can net gambling losses against her winnings, but only if she itemizes on Schedule A.
Name two of the seven material participation tests.
What are the 500 hour test, substantially all participation test, 100-Hour test, Significant Participation Activity test, Five of Ten Years Test, Personal Service Activity Test, Facts and Circumstances Test.
Give the formula for calculating Medicare and Social Security portion of the FICA taxes.
What is gross wages multiplied by 1.45% for Medicare and 6.2% for Social Security?