CFP - Taxes

Self employment taxes percent

15.3

12.4 old age

2.9 medicare

profit x .9235 x .0765 - employer share deduct

off income not taxes paid

Section 1033

same use property

dividends on life insurance

not taxable unless exceed basis

S corp

must be citizens

all must agree not majority

2%+ owners are not employees

LIFO recapture

C Corp

double taxed

punitive damages

included in gross income

capital asset

NOT

copyright, accounts receivable, depreciable property, inventory, production of income

real estate losses

25k limit for non-passive income

reduce by 50% income over 100k

charitable gifts

if unrelated to charity, exemption is basis

30% of AGI for all real estate, stocks

portfolio vs passive income

portfolio = interest, dividends, non-passive investment property

Passive = passive rental properties

casualty losses

Amount after deductible you would’ve gotten back, subtract that from the loss. You can claim that amount on taxes, subject to $100 floor and 10% of AGI limitation

MACRS depreciation 1245

cant deduct more than you depreciate

taxable distribution from stock

distribution x (taxable DNI / total DNI)

taxable dividends

only taxable up to the earnings

taxpayer use test

properties must be used in similar endeavors as previous properties

functional use test

use must be the same as previous properties

kids unearned income

amount - 1350 - (greater of 1350 or amount allowed)

capital gains

Stock – 0-15-20%

Collections 28%Buildings – 25%

at risk rules

passive loss = 25k, reduced by 50% over 100k

(Loss / total loss) x net loss