CPWA Taxes – Complete Guide With Correct Solutions
Calculate taxes Right Ans - Gross income
- above line deductions (retirement, alimony)
=AGI
- itemized (charity, medical, standard)
- personal exemptions
= taxable income
* tax rates
= federal income tax due
- credits ( child care, education)
= federal tax payable
+ other taxes (AMT, self employment)
= total federal tax payable
AMT Calculation Right Ans - Taxable Income
+ adjustments (standard or itemized deduction, private activity bonds) and
preferences
- AMT Exemption amount, 111k or 71k
*AMT Rate 26%
-tax credits
Compared to regular tax, higher amount must be reported as taxes due
Differences of AMT Right Ans - Add back adjustments and preferences
There is an exemption amount
Phase out for exemption amount
To calculate AMT, start with ___________, subtract ________________, add
______________ Right Ans - - Start w AGI
-Subtract allowable (same amt as you subtract from GI): casualty losses,
residence interest, charitable deductions, investment interest, gambling
losses, medical expenses, 2% misc. deductions (note: taxes NOT here!)
-Add: excess accelerated depreciation, interest on private activity bonds, ISO
bargain element
AMT easy calculations Right Ans - Subtract exemption from AMTI as long
as under phase out
Multiply taxable excess threshold by 26% and remainder by 28%
Add the two numbers together to get AMT due
, Public Charity cash Right Ans - FMV up to 60% deductible of AGI
Public Charity Long Term Gain Right Ans - FMV up to 30% of AGI
Private Foundation Long Term Gain Right Ans - Basis unless qualified
appreciated stock, 20% of AGI limit
Private Foundation Cash Right Ans - FMV up to 30% of AGI
Short Term Gains to Public Charity Right Ans - Deduct Basis only, up to
50% of AGI
Short Term Gain to Private Foundation Right Ans - Deduct Basis, only up to
30% of AGI
CRUT Right Ans - Donor receives no less than 5% annually, remainder to
charity at death
NIMCRUT Right Ans - 5% or actual income - defer income, real estate,
growth stocks,
Carryover of excess charitable contributions Right Ans - five years on a
first-in, first-out basis after current year contributions are deducted subject to
percentage of income limitation
Interest Expense Classifications Right Ans - Mortgage
Investment
Business Activity
Mortgage Interest Deduction Right Ans - Interest Paid on real estate loans,
capped at 750k
Home equity deducted only if used for home
Investment Interest Expense Right Ans - Cannot exceed net investment
income
No passive income
Has to be an investment
Calculate taxes Right Ans - Gross income
- above line deductions (retirement, alimony)
=AGI
- itemized (charity, medical, standard)
- personal exemptions
= taxable income
* tax rates
= federal income tax due
- credits ( child care, education)
= federal tax payable
+ other taxes (AMT, self employment)
= total federal tax payable
AMT Calculation Right Ans - Taxable Income
+ adjustments (standard or itemized deduction, private activity bonds) and
preferences
- AMT Exemption amount, 111k or 71k
*AMT Rate 26%
-tax credits
Compared to regular tax, higher amount must be reported as taxes due
Differences of AMT Right Ans - Add back adjustments and preferences
There is an exemption amount
Phase out for exemption amount
To calculate AMT, start with ___________, subtract ________________, add
______________ Right Ans - - Start w AGI
-Subtract allowable (same amt as you subtract from GI): casualty losses,
residence interest, charitable deductions, investment interest, gambling
losses, medical expenses, 2% misc. deductions (note: taxes NOT here!)
-Add: excess accelerated depreciation, interest on private activity bonds, ISO
bargain element
AMT easy calculations Right Ans - Subtract exemption from AMTI as long
as under phase out
Multiply taxable excess threshold by 26% and remainder by 28%
Add the two numbers together to get AMT due
, Public Charity cash Right Ans - FMV up to 60% deductible of AGI
Public Charity Long Term Gain Right Ans - FMV up to 30% of AGI
Private Foundation Long Term Gain Right Ans - Basis unless qualified
appreciated stock, 20% of AGI limit
Private Foundation Cash Right Ans - FMV up to 30% of AGI
Short Term Gains to Public Charity Right Ans - Deduct Basis only, up to
50% of AGI
Short Term Gain to Private Foundation Right Ans - Deduct Basis, only up to
30% of AGI
CRUT Right Ans - Donor receives no less than 5% annually, remainder to
charity at death
NIMCRUT Right Ans - 5% or actual income - defer income, real estate,
growth stocks,
Carryover of excess charitable contributions Right Ans - five years on a
first-in, first-out basis after current year contributions are deducted subject to
percentage of income limitation
Interest Expense Classifications Right Ans - Mortgage
Investment
Business Activity
Mortgage Interest Deduction Right Ans - Interest Paid on real estate loans,
capped at 750k
Home equity deducted only if used for home
Investment Interest Expense Right Ans - Cannot exceed net investment
income
No passive income
Has to be an investment
