GIFT TAX COMPUTATION FORMULA
Adjusted Taxable Gifts
Past Taxable Gifts
Total Taxable Gifts
Estate and Gift Tax Rate Schedule
Gift Tax on Total Taxable Gifts
Gift Tax Payable on Past Taxable Gifts
14: THE DEFAULT CLASSIFICATION: for a single-member entity is as a separate entity from the taxpayer, a sole proprietorship. An election can
be made by the entity to be treated as an association taxed as a corp. Taxed as either an S Corp or a C Corp. To
COMPLETE FORMATION: No G/L is recog. if a person(s) transfers prop. to a corp. solely for corp.s stock and immediately after the person is
in control of 80% voting stock and 80% all other shares. Services in exchanges for property are fully taxable as OI.
If, at date of gift, FMV > donors basis, then donees basis is the donors basis. GIFT TAX PAID = FMV-Basis/FMV x Gift Tax
If, at date of gift, FMV < donors basis, then donee uses the donors basis if the asset is later sold for a GAIN. If asset is later s
Dwelling unit: property that provides a place suitable for people to occupy (live and sleep).
- Mobile home
- Other similar property (doesnt include hotel, motel or inn)
May be solely personal, combo of personal
Deductions for AGI are generally preferred over deductions from AGI because deductions above
the line (for AGI) reduce taxable income dollar for dollar.
Deductions for AGI
1. Deductions directly related to business activities
2. Deductions indir
Chapter 13- LO 1 2 4 6
Defined Benefit Plans:
Max annual benefit an employee can receive is the lesser of:
1. 100% of the average of the employees 3 highest years of compensation or
- 5-year clif
- 7 year graded (
Two key tax characteristics that affect after-tax returns from investments are:
1. The timing of tax payments or tax benefits
2. The rate at which investment income or gains are taxed or deductible expenses or losses
generate tax savings.
Regular Federal Income Tax Computation
Tax Rate Schedules
Tax brackets are widest and higher levels of income are taxed at the lowest rates for married
filing jointly, then head of household, then single, and finally married filing separately.
When a partner sells their interest in the partnership the amount realized includes any debt relief.
Sellers gain/loss on sale of partnership interest = amount realized outside basis
Sellers gain/loss on sale of partnership interest is first
Entity vs. Aggregate The tax laws sometimes treat partnerships as an entity (like a corporation) and
sometimes like an aggregate of individual partners put together.
Capital interest right to receive a share of the partnership net assets if the
To be able to elect S corp status a corporation must have only US citizens or residents, estates, certain
trusts, and certain tax-exempt organizations as shareholders, shareholders CANNOT be corporations
(S or C) or partnerships. There may be
Estate and gift taxes have been integrated. These taxes use the same unified transfer tax rate and
count toward the same lifetime unified tax exemption amount of $5,450,000 (in 2015).
Both gift and estate taxes have marital deductions and chari
Please complete the Express Catering, Inc.s 2016 tax return based upon the information provided below.
If required information is missing, use reasonable assumptions to fill in the gaps. Ignore any Alternative
Minimum Tax (AMT)
Chapter 9: Business Income, Deductions, and Accounting Methods
1. Describe the general requirements for deducting business expenses and identify common business deductions.
2. Apply the limitations on business deductions to distinguish
Tax Research, Practice, and Procedure
OBJECTIVES OF THE COURSE
After completing this course, you should be able to:
1. Identify the basic tax research steps.
2. Search the primary authoritative sources of the tax law and understand the relative weight o
Rewrite the following "citations" in a proper form."
Sec. 1351 of the 1986 Code IRC 1351
Treas. Regulation 1.614-5(b)(1) Treas. Reg. 1.614-5(b)(1)
Bessie Lasky 57 USTC 9482 Lasky v. Commissioner,
Teaching Assignment: Employee v. Independent Contractor
Assigned Reading: Revenue Ruling 87-41
A person is an employee if the relationship between that person and the person
for whom he performs services
1. Gambling Losses
Gambling debt to casino for 100,000
Settled for 60,000
Zarin v. Commissioner 916 F.2d 110 (1990, CA-3)
o Unenforceable, not a cancellation of debt, no income on tax return
Gambling winnings go in gross income, other income
TAX5065 Fall 2016
Journal of Taxation Sales & Use Tax Implications of Loyalty Programs
The competitive consumer environment of today has made loyalty programs a huge part
of the shopping experience. Loyalty programs have
Introduction to Entities
When the decision to launch a new business is made, the participants must choose a legal form
of entity. Available options include sole proprietorships, general partnerships, limited
CASE 1: Gambling Losses
o Claim gambling losses up to amount of winnings
o Form 1040 Sch. A Other Misc. Deductions not subject to 2% limit
Professional Gambler deduct ordinary & necessary business expenses under Sch. C
165 Losses from wa
Case #24: Prepaid Interest
You are acquainted with I.M. Loyer, who is a very good friend of Mike's. Mike has sought his counsel since Mr. Loyer is a tax
attorney and Mike's brother-in-law, I.R. Code, the sole owner of G.A.S. Corporation, ha
Corporate Tax Exam 4
A. Affiliated Groups
Two or more corporations where one corporation directly owns 80% of the voting
power & value of another corporation
Additional Corporations Belonging to Affiliated Group
o 80% of voting p
Case #21: Accumulated Earnings Tax
Fitness, Inc., was in the business of designing and producing athletic wear, such as jogging shorts, swimming trunks, and
tennis shoes. The owners of Fitness wanted to enter related fields and expand their
Corporate Tax Final Review
A. Distinguishing Corporations for Federal Tax Purposes
Why distinguish corporations from other types of entities?
o Corporations are subject to double taxation
o Corporate losses cannot be deducted by it
Case #4: IRA Deduction
Mr. John Sysco incurred substantial professional fees in connection with several millions of dollars of investments that he
inherited from his father. In 20X1, fees for investment advice, bookkeeping, and tax return p