Tax QuickSheet - AR

Tax QuickSheet - AR - I. Gross Income A. 61: All income is...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
I. Gross Income A. §61: All income is included (broadly) unless there is an exception (specific) 1. Ordinary income: progressive rates a) Compensation b) Dividends c) Interest, etc. 2. Capital gains: subject to preferential tax treatment for non-corporate taxpayers of 20% maximum (§1.h) a) Income from sale or exchange of capital assets (§1221) (1) Long term capital assets: held for more than one year (2) Short term capital assets: held for less than one year b) §1222 (11): net capital gain: excess of the taxpayer’s net long term capital gain over the taxpayer’s net short-term capital loss (offset by subcategory first, according to applicable rates) (1) §1231: real property used in business held for more than one year is treated as LTCG (2) If both are gains, the NLTCG is NCG, NSTCG is ordinary income
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
c) Once you have NCG, adjust by taking away any unrecaptured §1250 gain (capital gain derived from the sale of depreciable buildings) and applicable rate B. Requirements 1. Undeniable accessions to taxpayer’s wealth a) Compensation for services 2. Clearly realized by taxpayer 3. Complete dominion 4. No consensual obligation to repay the financial benefit a) Cannot be a loan b) Illegal income included in gross income: forced to repay 5. Not represent a return of investment 6. Not an exclusion a) §104: damages for personal physical injuries b) §119: EE meals and lodging provided by ER while on ER’s business c) §74: prizes and awards (1) Not apply to cash transfers d) §132: fringe benefits (1) §132.a.2: EE discount (up to ER’s usual profit on item) (2) §132.a.4: de minimus e) §§102: gifts and inheritances (1) Gifts (a) Test
Background image of page 2
(i) Transferor’s intent underlying transfer (ii) Detached, disinterested generosity (b) §274.b: limitation for business gifts ($25 p/year p/ donee) (c) Never excludable if between ER and EE (2) Inheritances (a) Income received through will or intestacy C. Form and source of income is irrelevant (§61) D. §83: transfer of property in connection with the performance of services 1. Difference between value and what you pay for it is gross income at the first time the rights are transferable or it is free from a substantial risk of forfeiture (§83.c.1:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 12

Tax QuickSheet - AR - I. Gross Income A. 61: All income is...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online