AWMA MODULE 5 QUIZ INCOME TAX PLANNING FOR HIGH NET WORTH CLIENTS Questions & 100% Correct Answers
5 views 0 purchase
Course
AWMA
Institution
AWMA
Which one of the following is NOT an allowable itemized deduction in
computing the alternative minimum taxable income?
A) Charitable contribution deduction
B) State and local income taxes
C) Qualified housing interest
D) Investment interest expense
~~> B.
State and local income taxes a...
AWMA MODULE 5 QUIZ INCOME TAX
PLANNING FOR HIGH NET WORTH CLIENTS
Questions & 100% Correct Answers
Which one of the following is NOT an allowable itemized deduction in
computing the alternative minimum taxable income?
A) Charitable contribution deduction
B) State and local income taxes
C) Qualified housing interest
D) Investment interest expense
✓ ~~> B.
State and local income taxes are not an allowable itemized deduction for
the AMT. Thus, clients in states with high income taxes (and property taxes)
are more likely to be affected by the AMT than those in states with lower
taxes. Remember that only $10,000 of taxes may be deducted as an itemized
deduction.
Which one of the following statements is true with regard to self-employment
taxes?
A) A taxpayer is allowed to deduct one-half of his or her self-employment tax
Net investment income is the taxpayer's investment income—typically
interest, nonqualified dividends, and short-term capital gains. Investment
interest is an itemized deduction. Excess investment interest expense can be
carried forward into succeeding tax years.
For a taxpayer with an AGI in excess of $150,000 for the prior tax year ($75,000
if married filing separately), the estimated tax penalty safe harbor is
A) 90% of the current year's tax liability or 100% of the prior year's tax liability.
B) 110% of the current year's tax liability or 125% of the prior year's tax liability.
C) 80% of the current year's tax liability or 120% of the prior year's tax liability.
D) 90% of the current year's tax liability or 110% of the prior year's tax liability.
✓ ~~> D.
The safe harbor is 90% of the current year's tax liability or 110% of the prior
year's tax liability if the taxpayer's prior year AGI exceeded $150,000.
If the prior year's AGI was $150,000 or less, then the safe harbor is 90% of the
current year's tax liability or 110% of the prior year's tax liability.
Master01 | September, 2024/2025 | Latest update
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ExamArsenal. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.49. You're not tied to anything after your purchase.
