tax exam 1 outline

tax exam 1 outline - Authority of Federal Tax System...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Authority of Federal Tax System Judicial Rev Rulings (3) Procedures (3) Letter Rulings (5) TAMS (8) Determ.Letters (6) (area director) US Supreme (highest) US Courts of Appeal ( next highest appellate) Tax Court – Regular Decisions ( highest trial court) T.C. Memorandum US Fed. Claims US District (lowest trial court) Small Cases Income (broadly conceived) Less: Exclusions Gross Income Less: Deductions for AGI Adjusted Gross Income Less: > of SD or total itemized Less: P&D Exemptions Taxable Income EXCLUSIONS FROM GI: DONATIVE : gifts, life insurance proceeds (post-death only; if transferred and gain occurs, gain is taxed except if between partners/ officers), acc. death benefits, scholarships (tuition & rel. expenses. ..for employee’s children, included in taxable income of parent), PERSONAL: personal injury payments (not punitive) & related loss of income, health benefits purchased by employee, long-term care (limited to > of $280/day or actual cost, regardless of who purchases it) EMPLOYEE: fringe benefits, accident & health benefits (premiums), HSA (employer can contribute up to 1/12($3000), or 5,950 for families per month), group term life insurance (only first $50,000— this does not apply to partners, only to employees ), child care provide by employer (max $5,000), education assistance provided by employer (max $5,250), adoption expenses (up to $12,150), cafeteria plans, no-additional cost benefits ( no excl. for higher paid employees if discriminatory), qualified discounts (max. of cost for goods, 20% services—discriminatory rule ), working condition & de minimis fringes , qual. Transportation (max $230 for parking, $230 for transit & CHV), qual. Moving expenses, qual. Retirement planning (discriminatory rule), military benefits, foreign earned income (up to $91,400 and between 16-30%($91,400) for foreign housing; must be resident for 330 days, or pro-rate), CHAPTER 3: GI includes embezzled funds, prizes, punitive damages, treasure trove SD for child = greater of $950 or $300 + earned income; cannot exceed regular SD for single of $5,700 Prop tax deduction (in addition to SD)- lesser of paid or $500 ($1000 for joint) Qualifying relative GI test- must be less than exemption amt to qualify Joint Return test- no dep. Exemp. Child is married filing jointly (exceptions) To be head-of-household, dependent must meet relationship test
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This document was uploaded on 04/20/2010.

Ask a homework question - tutors are online