Exam 8: Tax Planning

What limits a taxpayer's deduction loss to the amount that the taxpayer actually has at risk of loss and affects individuals, estates and trust, partners, shareholders in S corporations, and most C corporations equally?

What system is considered a parallel income tax system?

What is the tax base to which you would apply a tax rate when figuring alternative minimum tax?

Your client is considering becoming a trust grantor, but is concerned about tax obligations that they may face; what should the client be informed of?

Personal or real property assets used in trade or business that are held for more than one year are what type of asset?

Your client is making a $5,000 contribution to a local museum. The client realizes that there are tax deductions that can be applied to the current tax year. What would you inform the client of?

Which of the following is NOT an adjustment to adjusted gross income, because it is allowed for alternative minimum tax purposes?

A gift to which of the following is generally deductible?

What is a disadvantage to Roth IRAs?

The acceleration of deductions reduces taxes in the current year; there are several strategies for accomplishment. What item below would be a strategy?

To what other areas of financial planning does tax planning most closely apply?

Which is not an individual having to file a tax return even if their gross income is below the required amount?

What trust has the personal exemption amount of $100?

What is the limit of loss recognition on at-risk activities?

What type of trust income must first be allowed by state law versus IRS statute?

What type of corporation is subject to flat tax?

What form is used when filing for trusts and estates in each calendar year that it has taxable income and to report income and distributions?

There is a distinction made between gifs that are used by a charity (use related) and gifs that are not used (use unrelated). What situation best describes an use unrelated gift received by a charity?

Your client informs you that he cheated on his income taxes by omitting 30 percent of his gross income and he's not really worried about being caught. You inform him that the IRS has many different systems at their disposal to catch cheaters and that the IRS has a statute of limitation for fraud detection. Under this scenario, how long is the statute of limitation?

Which is not a disadvantage for Married Filing Separately (MFS)?