Tax Law & Regulations Flashcards
7 cards from real CIMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Tax Law & Regulations flashcards as text
The annual gift tax exclusion for 2024 allows an individual to give how much per recipient without using any lifetime exemption?
Answer: $18,000
The annual gift tax exclusion was $18,000 per recipient in 2024, indexed for inflation in $1,000 increments under IRC Section 2503(b).
Under IRC Section 1031, a like-kind exchange of real property must be completed within what time frame from the sale of the relinquished property?
Answer: 45 days identification / 180 days completion
The replacement property must be identified within 45 days and the exchange completed within 180 days of the transfer of the relinquished property.
Social Security benefits become partially taxable at the federal level when combined income (AGI + nontaxable interest + 50% of SS benefits) exceeds what threshold for a single filer?
Answer: $25,000
Up to 50% of Social Security benefits become taxable when combined income exceeds $25,000 for single filers; up to 85% is taxable above $34,000.
Which strategy involves transferring a business interest to family members at a discounted value, leveraging valuation discounts for lack of marketability or control?
Answer: Family Limited Partnership (FLP)
FLPs allow senior generation owners to transfer limited partnership interests at discounted values due to lack of control and marketability, reducing gift and estate tax exposure.
Under the 'at-risk' rules of IRC Section 465, which amount limits a taxpayer's deductible losses from a business activity?
Answer: Total capital invested plus share of recourse debt and qualified nonrecourse financing
A taxpayer is at-risk for the amount of cash and property contributed plus recourse liabilities and qualified nonrecourse financing for real estate activities.
A corporation's dividend paid to a C-corporation shareholder that owns 20–79% of the paying corporation qualifies for a dividends received deduction (DRD) of:
Answer: 65%
Under IRC Section 243, a C-corp owning at least 20% but less than 80% of another corporation qualifies for a 65% DRD, mitigating triple taxation of corporate earnings.
The generation-skipping transfer (GST) tax is imposed on transfers to 'skip persons.' A skip person is generally defined as:
Answer: A person assigned to a generation two or more levels below the transferor
A skip person is a natural person assigned to a generation at least two levels below the transferor, or a trust where all interests are held by skip persons.