Tax Reg - Individual Receives - include/exclude for GI

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