Tax compliance and planning concepts tested on the CPA TCP discipline section.
40 cards · basic cards · AI-written, checked twice. Edit anything.
- What is Adjusted Gross Income (AGI)?
- Gross income minus above-the-line deductions
- What does the standard deduction do?
- Reduces taxable income by a flat amount without needing to itemize
- How long must a capital asset be held to qualify for long-term capital gain treatment?
- More than one year
- What is Section 1231 property?
- Depreciable business property and real property used in a trade or business, held more than one year
- What does Section 1245 depreciation recapture convert to ordinary income?
- Gain on disposal of personal property up to the amount of depreciation previously claimed
- What does Section 1250 depreciation recapture apply to?
- Excess depreciation on real property, recaptured as ordinary income
- What type of property currently qualifies for a Section 1031 like-kind exchange?
- Real property held for business or investment use
- What is 'boot' in a like-kind exchange?
- Non-like-kind property or cash received that triggers recognized gain
- Under the installment sale method, when is gain recognized?
- As payments are received over time, rather than all at the time of sale
- The wash sale rule disallows a loss deduction if a substantially identical security is repurchased within ____ days before or after the sale.
- 30
- What is the general rule for deducting passive activity losses?
- They can only offset passive income, not active or portfolio income
- What is the special allowance amount for active participation rental real estate losses against nonpassive income?
- Up to $25,000, phased out at higher income levels
- What do the at-risk rules limit?
- A taxpayer's deductible loss to the amount they have economically at risk in an activity
- How is an individual net operating loss generally treated after the Tax Cuts and Jobs Act?
- Carried forward indefinitely, limited to 80% of taxable income, generally no carryback
- What is the maximum number of shareholders an S corporation may have?
- 100 shareholders