Accy 312 Cheatsheet

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C.7. Bad debt, individual loss. Capital loss: deduc up to 3k/yr, for AGI, remainder carried forward. Bad debt – Bus: deduc if partially or totally worthless, amount =uncollectible. NonBus: deduc if totally worthless, capital loss. Worthless sec: deduc if totally worthless, capital loss. Small Bus stock (≤ 1M): Deduc Ordinary loss 50k if single (100k if MFJ). Remainder is capital loss (3k/yr). Casualty&Theft – Nonpersonal: Complete casualty or theft. Loss=Adj.basis – insurance (only when claimed). Partial casualty. Loss= lesser of FMV decline or Adj basis, minus insurance. FOR AGI. Personal: Loss=lesser of FMV decline or Adj basis, minus insurance (regardless claimed). Reduce 100 per casualty. Aggregate casualties 10%AGI floor. Income producing assets, non-rental (stock/bond): similar to Nonpersonal, but 2%AGI floor. Domestic manufacture: deduc 9% * lesser of QPAI or Taxable inc before DPAD. Deduc up to 50% W-2 wages. NOL – 2 yrs carryback, 20 yrs carryforward. If NOL is due to casualty/theft for individual, carryback 3 yrs. Farming, carry back 5 yrs.

C.10. Itemized. Medical. Charity. Medical – deduc unreimbursed exp subject to 10% AGI floor (7.5% if ≥ 65 yrs old). Medical capital exp: deduc permanent improvement cost to extent cost > increase in home value. Medical transport: 23c/mileage; Lodging: 50 pp/night. Personal residence: deduc interest on mortg loan ≤ 1M. Student loan: FOR AGI, max deduc 2,500. Investment/margin interest: deduc up to investment income (if no income, no deduc). NOT deduc personal interest on auto loan. Charity: deduc=donation – tangible benefits, deduc up to 50%AGI. Services contribution-> NOT deduc. Ordinary & short-term capital property: deduc= lesser of Adj basis or FMV at donation date. Long-term capital property: Deduc= FMV.

C.2. Sources of laws. Primary authority: Constitution; Court decisions; IRC; Treaties; Treas Reg; Revenue rulings/ procedures. Secondary authority: Tax services (BNA, CCH, RIA); Tax articles (Tax notes, WSJ, magazine). Private letter rulings only apply to taxpayer who filed the letter.

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