Taxation — Individual & Corporate Flashcards
6 cards from real Certified Public Accountant practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Taxation — Individual & Corporate flashcards as text
What is the net investment income tax (NIIT) rate imposed under the Affordable Care Act on high-income individuals?
Answer: 3.8%
The NIIT imposes an additional 3.8% tax on the lesser of net investment income or the excess of modified AGI above the threshold ($200,000 single, $250,000 MFJ).
Under the IRC, what is the maximum deductibility limit for business meals (as of 2023 and beyond)?
Answer: 50% deductible
Business meals are generally 50% deductible (as of 2023 and beyond), after the temporary 100% deduction for restaurant meals expired at the end of 2022.
What is the federal tax treatment of alimony payments under divorce agreements executed after December 31, 2018?
Answer: Not deductible by the payer, not includable in recipient's income
Under the Tax Cuts and Jobs Act, for divorces executed after December 31, 2018, alimony is not deductible by the payer and not included in the recipient's gross income.
Which depreciation method allows businesses to deduct a larger portion of an asset's cost in the early years of its life?
Answer: Double declining balance
The double declining balance method is an accelerated depreciation method that applies twice the straight-line rate to the asset's declining book value, front-loading deductions.
What is the corporate alternative minimum tax (CAMT) rate introduced under the Inflation Reduction Act of 2022?
Answer: 15%
The Inflation Reduction Act of 2022 created a new 15% corporate alternative minimum tax on the adjusted financial statement income of large corporations with over $1 billion in book income.
Under the Tax Cuts and Jobs Act, what is the maximum deduction for qualified business income (QBI) available to pass-through entity owners?
Answer: 20% of qualified business income
IRC Section 199A allows eligible taxpayers to deduct up to 20% of their qualified business income from pass-through entities, subject to income thresholds and other limitations.