TCP formulas

gross income

sum of all taxable income items

AGI

gross income - above the line deductions

taxable income

= AGI - standard deduction or itemized deductions - qualified business income deduction

income tax

= tax from rate schedules + additional taxes - nonrefundable credits

total tax

= income tax + self employment tax + additional taxes - credits

balance due or refund

= total tax - withholding - estimated tax payments - refundable credits

itemized deductions

= medical + taxes + interest + charitable contributions + casualty losses + other allowable deductions

deductible medical expense

= qualified medical expenses - 7.5% * AGI

SALT deduction

$40,400 - MAGI reduction

MAGI Reduction

= 30% * (MAGI - $505,000)

deductible charitable contribution

= contribution - 0.5% * AGI floor

2026 charitable deduction - single

$1,000

2026 charitable deduction - MFJ

$2,000

child tax credut

= $2,200 * qualifying children

refundable child tax credit

= $1,700 * eligible children

allowed nonrefundable credit

lower of available credit or tax liability

net earnings from self employment

= self employment income * 92.35%

Self employment tax

= social security portion + Medicare portion + additional medicare tax

deduction for self employment tax

= 50% * Self employment tax

tentative QBI deduction

= 20% * qualified business income

QBI deduction

lower of 20% * qualified business income, or 20% * taxable income

compensation income

= FMV at exercise - exercise price

employer deduction

= employee compensation income

AMT adjustment

= FMV at exercise - exercise price

sale gain or loss

= selling price - tax basis

allowed loss

= lower of allocated loss and available basis

suspended loss

= allocated loss - allowed loss

amount at risk

cash invested + adjusted basis of property invested + recourse debt + qualified nonrecourse real estate debt − withdrawals

net passive income

= passive income - passive deductions

suspended PAL

= passive loss - allowed passive loss

excess business loss

= business deductions - business income - permitted threshold

ending outside basis

= beginning basis + contributions + income allocations + share of liability increases − distributions − loss allocations − share of liability decreases

partnership inside basis

= partnership’s adjusted basis in each asset

partner’s basis increase

= partner’s share of partnership liability increase

partner’s basis decrease

partner’s share of partnership liability decrease

recognized gain

= cash distributed - outside basis

built in gain or loss

= FMV at contribution - contributor’s adjusted basis

ending stock basis

= beginning stock basis + contributions + income items + tax-exempt income − distributions − nondeductible expenses − losses and deductions

ending debt basis

= beginning debt basis + direct loans to S corporation − repayments − losses allocated after stock basis reaches zero

taxable capital gain

= distribution - stock basis

current year NOL

= allowable deductions - gross income

taxable income after NOL

= taxable income before NOL - allowed NOL deduction

consolidated taxable income

= members’ taxable income or losses + consolidation adjustments − intercompany eliminations

corporate gain on property distribution

= FMV of property - corporation’s adjusted basis

realized gain

= FMV received + liabilities relieved - adjusted basis transferred

corporate basis

= shareholder’s adjusted basis + gain recognized by shareholder

stock basis

= basis of property transferred + gain recognized - boot received

shareholder gain or loss

= FMV of assets received + cash received - stock basis

realized gain or loss

= amount realized - adjusted basis

amount realized

= cash received + FMV of property received + liabilities assumed by buyer

recognized gain or loss

= realized gain or loss - deferred or excluded amount

deferred gain

= realized gain - recognized gain

boot received

cash received + FMV of non-like-kind property received + liabilities relieved − liabilities assumed

basis of replacement property

= FMV of replacement property - deferred gain

disallowed loss

= seller’s adjusted basis - selling price

recognized gain or loss

= later selling price - adjusted basis

gross profit percentage

= (selling price - adjusted basis - selling expenses) / contract price

annual recognized gain

= principal collected * gross profit percentage

annual return of basis

= principal collected - recognized gain

annual depreciation

= (depreciable basis - salvage value) / useful life

depreciation deduction

= depreciable basis * MACRS percentage

bonus depreciation

= 100% * qualified basis

Distributable net income

= trust or estate taxable income + tax-exempt income - deductions not distributed

taxable income (estate or trust)

= gross income - deductions - distribution deduction - exemption

taxable gift (gift and estate)

FMV transferred − consideration received − annual exclusion − marital or charitable deduction

gift tax

tentative tax on cumulative taxable transfers − gift tax on prior transfers − available unified credit

taxable estate

= gross estate - deductions

federal taxable estate

= taxable estate + adjusted taxable gifts

estate tax

= tentative tax - unified credit - applicable credits

taxable conversion

= conversion amount - nontaxable basis portion

nontaxable portion

= distribution * (total IRA basis / total IRA value)

required minimum distributions

= prior year end account balance / applicable distribution period

return on investment

= investment gain / amount invested

after tax return on investment

= before tax ROI * (1 - tax rate)

future value

= PV (1+r)^n

Present value

= FV / (1 + r)^n

required periodic contribution

= future value needed / annuity factor