Prepaid Income
Include
Prepayments for merchandise inventory that has not been shipped yet
Exclude
Piano teacher receives advance payments on 3 yr contract for services
Can defer inclusion one year. Can include in yr 1 and yr 2 but not yr 3
Toaster given to depositor for opening interest bearing account
Include
Imputed interest on below-market term loans
Include
Rent income from investment
Include
Bonus received for granting a lease (lessor view)
Include
Refundable deposit (lessor view)
Exclude
Value received to cancel/modify a lease (lessor view)
Include
An amount paid by a lesser to maintain the property in lieu of rent (lessor view)
Include
FMV of lessee improvements made to property in lieu of rent (lessor view)
Include and can deduct if property tax
Prepaid rent (lessor view)
Include
FMV of Lessee improvements not made in lieu of rent (lessor view)
Exclude
Rental income >15 days
Include
Cost of maintenance (lessee)
Deducted
Cost of expenditures (lessee)
Capitalized and depreciated
Rental income>15 days. How do you treat expenses?
Deduct
Rental income <15 days. Treatment of rental expense?
Excluded/ no deduction
dividend reinvestment plan
Include the dividends and discount (fmv-stock price) on payment of stock
Alimony
Deduct for Payor. Include for receiver
Child Support
Exclude for receiver. No deduction for payor
Annuities
Include for income greater than cost
Life insurance proceeds
Excluded
Interest on proceeds of life insurance
Include
Cancellation of debt
Include
Partnerships and s-corp
Include whether or not distributed
Decedent, estates, trusts
Include
Subpart F example to remember
Include: services provided by an Irish company in England under a contract entered into by US parent
Prize and awards
Include FMV if don't reject or give to charity
Unemployment benefits
Include
Bargain purchase
Include discount
Scholarships
Include room and board + amounts due to service (TA). Exclude Tuition, fees and books.
Treasure trove
Include
Gambling winnings
Include
Gambling losses
Exclude from GI And deduct up to winnings as Misc itemized expense (no 2% agi limit)
Original Issue Discount
Include discount amortization. Difference between Yield and coupon paid.
Non accountable Reimbursed Employee expense
Include employee reimbursements/advances. Deduct expenses on SchA subject to 2%agi limit
Accountable employee reimbursement
Include reimbursements>expenses
Moving expenses
Include Reimbursements>qualified moving expenses.
Services received for goods
Include FMV of goods given up
Receive loan proceeds
Exclude
Proceeds from employer owned life insurance>premiums paid post 8/17/06
Include
Life insurance proceeds>death benefit principal amount
Considered interest income and Included
Life insurance proceeds<death benefit principal amount
Exclude
Transfer life insurance proceeds to another person
Include
Accelerated death benefits
Exclude
Dividends paid on insurance policies
Exclude if less than premiums
Interest on VA insurance dividends left on deposit with VA
exclude
Pension
Exclude
Noncontributory plan withdrawals
Include
Gifts received
Exclude
Scholarship where service required
Include
Employee achievement award - non qualified plan award
<400 exclude
Employee achievement award - qualified plan award
<1600 exclude
Interest on redemption of series EE US Savings Bond
Exclude portion
Interest on State and local bonds
Exclude
Interest on Treasuries
Include
Interest on private activity bonds
Include
Interest on municipal arbitrage bonds
Include
Workers comp received
Excluse
Comp for slander of reputation
Include
Damages for lost profits in business
Include
Punitive damages
Include
Damages for solely for emotional distress
Include
Recovery of item received this year that had tax benefit in prior year
Include
Sale on principal residence
Exclude up to 250/500
Stock dividend
Exclude
Lessee improvements not in lieu of rent (lessor view)
Exclude
Insurance proceeds from damaged house
Exclude actual less normal expenses
Priest home/parsonage
Exclude
Combat zone comp
Exclude
Foster Care
Exclude
Receive services for property
Include FMV of property (+cash received). Ignore FMV of services
Employer provided medical coverage
Exclude. Include reimburses>expenses
Installment Sales
Include gain
Tips
Include when file the report to employer (10th day of following month) regardless when paid
Disability pay
Exclude
Accident insurance proceeds
Exclude
Damages for emotional distress by lawsuit. Not solely
Exclude