TAX 6845 – Tax planning & consulting Exam 1 – Study sheet General overview of tax planning • Goals and objectives of tax planning • Factors to consider in tax planning • The five basic tax questions • Fundamentals of tax planning • Tax planning – controlling the facts vs. tax saving elections • Legislative & judicial constraints on tax planning • Explicit taxes vs. implicit taxes Investment issues and the loss limiters • Why do we have the loss limiters? • Passive activity limitations – purpose (what are they trying to limit) & mechanics • At risk limitations – purpose (what are they trying to limit) & mechanics • How does one get labeled as “passive” – material participation defined • Exceptions to the passive loss rules – rental real estate activities • Investment interest expense limitation • Rental activities and vacation homes – 3 possible outcomes Beginning a business – Formation, periods and methods • How do you distinguish between business activities, investment-related activities and
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Expense, Taxation in the United States, FIFO and LIFO accounting