...I:14-1 Chapter I:14 Special Tax Computation Methods, Tax Credits and Payment of Tax Discussion Questions I:14-1 Most taxpayers are not subject to the alternative minimum tax (AMT) because they do not have substantial tax preferences and AMT adjustments and because there is a liberal exemption amount to reduce the tax base on which the AMT is calculated. However, more and more taxpayers in recent years are being subjected to the AMT. p. I:14-2. I:14-2 No, the alternative minimum tax does not apply if an individual's tentative minimum tax under the AMT rules is less than his regular tax liability. It applies only if the tentative minimum tax exceeds the regular tax liability. p. I:14-3. I:14-3 b. only. Only excess depreciation for real property placed in service before 1987 is a tax preference item. For tax years prior to 1987, net long-term capital gains were a tax preference item (i.e., the 60% long-term capital gain deduction) and for taxable years prior to 1993 the appreciated element related to charitable contributions of capital gain real property was a tax preference item. p. I:14-4. I:14-4 a, b, c only. Itemized deductions that are not allowed in computing AMTI, excess depreciation on real property placed in service after 1986, and excess MACRS depreciation for personal property placed in service after 1986, are all AMT adjustments. Tax-exempt interest is not an AMT adjustment but may be a tax preference item if the bonds are private activity bonds. pp...
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...The Low Income Housing Tax Credit gives funding for the development of low-income housing by giving an investor, a federal tax credit equal to a percentage up to seventy percent. To take advantage of the LIHTC, a developer will pitch a project to a state agency, win tax credits, complete the project, certify its cost and rent-up the project to low income tenants. At the same time, an investor will make capital investments to the partnership that owns the project in exchange for being allocated the entity's LIHTCs over a ten year period. This pay for performance accountability has driven private sector to the LIHTC program. As part of the tax code, the LIHTC program creates public-private partnerships, and has leveraged more than $75 billion in private equity investment for the creation of affordable rental housing. Therefore, this has created many more projects for low income households to live in. Not only is it a win for the developer and city it is also a win for the community since they have a new place to call home at a affordable price. Additionally, these are usually new developments therefore the tenant will most likely be living in a newly developed building. Plus it avoids gentrification by allowing for lower income...
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...The Investment Appeal of Low Income Housing Tax Credits Overview of the LIHTC The Low Income Housing Tax Credit (LIHTC) provides incentives for corporations and individuals to invest in the acquisition, development and rehabilitation of affordable housing. The program offers federal tax credits to private equity investors that work with profit or non-profit developers in constructing or renovating rental properties for low-income tenants, those who earn 60 percent or less of the median family income for their county. As of 2010, the program has sparked the construction of over 1.7 million housing units throughout the country. The IRS allocates federal tax credits to Housing Credit Agencies (HCAs) in each state based on its population. HCAs award credits to housing developers based on their Qualified Allocation Plan (QAP), a rigorous and competitive application used to determine which developers will receive the credits. Once credits are acquired, equity investors purchase an interest in the business entity generating the tax credits, namely a limited partnership or limited liability company. The equity generated from the investor’s purchase is used to fund the property development. The tax credits are redeemed annually by investors over a ten-year period following the date that the property becomes operational, or “placed in service.” The number of tax credits, and subsequently the amount of equity raised, is calculated by computing the eligible basis, or the dollar amount...
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...First Time Home Owners Tax Credit Laura R. Kohler National American University Everyone dreams of owning their own home at some point in their life. This idea is set into our heads as children. We grow up, get a job, get married, buy a house and start a family. It’s the American dream. What if there was more incentive to buying your first house? Good news, there is. The first time home owners’ tax credit was designed especially for you. That is if you so happened to purchase your home between April 2008 and April 2010. In 2000, the United States economy began to fall. With this fall came the housing market crash. Some say that the housing market has yet to recover. It’s made a big step though. With the big fall in the housing market, Washington got worried and decided to step in to help. In December of 2009 mortgage rates were at a historical low. There were ideas of making a tax credit that would be 10% of the purchase price to help lower mortgage rates for anyone who bought a home. They thought that this would make people jump at the opportunity and finally make that first purchase. Another idea was to help struggling owners lower their mortgage and refinance. The problem with this was finding out who should really be saved. Purchasing is an amazing first step. It’s a great way to start securing a financial future for you and or your spouse and family. The big question is, are you ready? One of the first things that you will need to figure out...
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...The Home Renovation Tax Credit (HRTC) is identified as a potential instrument to stimulate the construction market by providing an incentive to home owners to engage in a minimum amount of house renovations (Garland, 2009). It was introduced back in 2009 as a temporary measure to provide a timely stimulus to the Canadian economy when the construction industry needed a boost (Warnica, 2015). Unlike the 2009 credit which resulted in $3 billion in government tax expenditures, the permanent HRTC is going to cost $1.5 billion in tax expenditures yearly and 15 percent annual credit would apply to renovations between $1,000 and $5,000 (McMahon, 2015). The tax credit is presumed to help Canadian families and support Canadian jobs. The potential benefit of Harper’s Home Renovation Tax Credit is that it will help curb underground activities (CHBA, 2015) and foster household health and safety. With HRTC, there is an incentive for home owners to hire legitimate tax paying professional contractors for home renovations. By requiring receipts to support HRTC claims, home owners will be discouraged from hiring unskilled underground operators- who work for cash and tend to ignore health and safety requirements in home renovations (CHBA, 2015). If home owners claim the tax credit, not only will underground activities in the construction industry reduce, there will be an increase in government revenues (Stinespring, 2011) as legitimate tax paying contractors will gain business that would otherwise...
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...A Little Bit of History The International Accounting Standard number 7 – Statement of Cash Flows (IAS7 or the standard) is the current authority issued by the International Accounting Standards Board (IASB) requiring the preparation and presentation of a Statement of Cash Flows, providing through it the historical changes in cash and cash equivalents of an entity. The standard was first issued in 1977 as IAS 7 – Statement of Changes in Financial Position by the International Accounting Standards Committee (IASC); subsequently, it was reissued in 1992 as IAS 7 – Cash Flow Statements. The updated standard was adopted by the IASB in 2001. Its name was changed to IAS 7 - Statement of Cash Flows in 2007 as a result of changes in terminology deriving from requirements in IAS 1 – Presentation of Financial Statements. Moreover, the issuance of new standards such as IFRS 10 – Consolidated Financial Statements, triggered minor amendments to IAS 7. Key differences between U.S. GAAP ASC 230 and IAS 7 The following table summarizes the main differences between the two standards. Subject | U.S. GAAP | IFRSs | Definition of cash and cash equivalents | Cash and short-term, highly liquid investments with maturities of generally 3 months or less are included. Bank overdrafts are not included. Restricted cash is not included. | Cash and short-term, highly liquid investments with maturities of generally 3 months or less are included. Bank overdrafts are included provided certain conditions...
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...About Results: Results, is a movement of passionate, committed everyday people. Together they use their voices to influence political decisions that will bring an end to poverty. The volunteers at Results receive training, support, and inspiration to become skilled advocates. Over time, volunteers learn to successfully advise policy makers, guiding them towards decisions that improve access to education, health, and economic opportunity. Multiply their impact through the massive power of advocacy whether it’s helping change policy to support millions of families putting food on the table or helping raise billions of dollars for the world’s most vulnerable children. Backed by the in-depth research and legislative expertise of staff, Results advocates realize the incredible power they possess to use their voices to change the world. They are a nonprofit and grassroots advocacy organization. That pushes for specific policies and legislation to address poverty and empowers people to become powerful voices for the end of poverty through grassroots advocacy. U.S Poverty Campaign: Results works to make a substantial difference in breaking the cycle of poverty in the United States while at the same time ensuring that our small but very engaged grassroots network makes a strategic impact; a couple of their main focuses are creating economic mobility: building ladders out of poverty, keeping food on the table: protecting federal nutrition programs, and empowering grassroots activists:...
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...Defending the Use of Tax Credits for Historical Preservation Historical establishments serve as reminders of the past to help people understand where they came from and to understand where they are headed. People feel more connected to a community when they can see visual reminders of a community’s evolution. One way in which to promote the maintenance and improvement of historical establishments is to offer benefits, such as Tax Credits, to property stakeholders. Keeping and renewing these Tax credits is vital to the future of historical preservation in our cities, states and country. Tax credits for historical preservation help create jobs, improve local economies through higher household income, are good for local communities, and are good for the environment. Some people would argue against Tax credits because they believe they hurt industries not related to historical preservation and is too much of a burden on tax payers. The biggest benefit to supporting historical preservation tax credits is in the number of jobs it creates. Historic preservation is more labor intensive than new construction, and is proven to create more and better-paying jobs. Since 1978 the investment in federally supported tax credits has created approximately 2.35 Million jobs which include 121.25 billion in Gross Domestic Products. These jobs were mostly created in the construction sector but also created jobs that impacted the service, manufacturing and retail trade sectors. Indirectly...
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...Budget Totals Old budget was $3748.1268 billion ($2673 billion in spending, $1075.1268 billion in tax expenditures and cuts). New budget is $3546.46 billion ($2677.6 billion in spending, $868.86 billion in tax expenditures and cuts). You have cut the deficit by $201.67 billion. Your new deficit is $199.33 billion. Spending ($2677.6 billion: increased $4.6 billion) Military Spending ($401.49 billion: cut $44.61 billion) $95.91 billion ..... Military personnel Cut $10.65 bil. from base of $106.572 bil.(-10%) $138.26 billion .... Operation and maintenance Cut $15.35 bil. from base of $153.619 bil.(-10%) $72.75 billion ..... Procurement Cut $8.08 bil. from base of $80.836 bil.(-10%) $61.32 billion ..... Research, development, test and evaluation Cut $6.8 bil. from base of $68.129 bil.(-10%) $14.53 billion ..... Military Construction, Family Housing and Other Cut $1.61 bil. from base of $16.145 bil.(-10%) $16.19 billion ..... Atomic Energy Defense Activities Cut $1.79 bil. from base of $17.990 bil.(-10%) $2.53 billion ...... Defense Related activities Cut $0.27 bil. from base of $2.814 bil.(-10%) Iraq and Afghanistan Operations ($86.06 billion: cut $25.78 billion) $84 billion ........ Military Operations Cut $20.99 bil. from base of $105.0 bil.(-20%) $2.06 billion ...... Reconstruction aid Cut $4.78 bil. from base of $6.851 bil.(-70%) Military Retirement ($138.58 billion: increased $23.1 billion) $49 billion ........ Military retirement ...
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...Application for a Tax Credit Certificate Please complete relevant sections in BLOCK LETTERS Personal Details First Name Surname Date of Birth (DD/MM/YY) Address PPS No. Nationality If you have a PPS No. but cannot provide it, state: Your Birth Surname, if different Civil Status - Insert T in the relevant section below: Married or in a Civil Partnership Separated, Divorced or Dissolved Civil Partnership Insert T in the box(es) if you, your spouse or civil partner hold a ‘full’ medical card (a ‘GP only’ medical card is not a ‘full’ medical card) Self Spouse or Civil Partner Single, Widowed or Surviving Civil Partner Male Female Form 12A / / Your Mother’s Birth Surname Residence Details If you lived outside the State during the last 24 months state: Date you went abroad (DD/MM/YY) Date of arrival or return to the State / / / / (DD/MM/YY) (if an Irish National) Intended duration of your stay Country of residence (i.e. number of months) prior to arrival here Permanent Temporary Are you here on a Permanent or Temporary basis? (insert T) Employment or Pension Details Name of Employer or Pension Company Address of Employer or Pension Company Employer’s or Pension Company’s PAYE Registered No. Staff or Personnel No. (if any) Occupation (e.g. Carpenter, Nurse, etc.) Full Time Part Time Date employment commenced (DD/MM/YY) Yes Yes / No No / Is this your first job in Ireland? Are you related to your employer by marriage, civil partnership or otherwise...
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...Key Features of Budget 2012-2013 http://indiabudget.nic.in Key Features of Budget 2012-2013 APPROACH TO THE BUDGET For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan. GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years. India however remains front runner in economic growth in any cross-country comparison. Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure. Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays. Indicators suggest that economy is turning around as core sectors and manufacturing show signs of recovery. At this juncture, it is necessary to take hard decision to improve macroeconomic environment and strengthen domestic growth drivers. Twelfth Five Year Plan to be launched with the aim of “faster, sustainable and more inclusive growth”. Five objectives identified to be addressed effectively in ensuing fiscal year. If India can build on its economic strength, it can be a source of stability for world economy and a safe destination for restless global capital. OVERVIEW OF THE ECONOMY GDP growth estimated at 6.9 per cent in real terms in 2011-12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial...
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...Key Features of Budget 2012-2013 http://indiabudget.nic.in Key Features of Budget 2012-2013 APPROACH TO THE BUDGET For Indian economy, recovery was interrupted this year due to intensification of debt crises in Euro zone, political turmoil in Middle East, rise in crude oil price and earthquake in Japan. GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4 per cent in preceding two years. India however remains front runner in economic growth in any cross-country comparison. Monetary and fiscal policy response for better part of past 2 years aimed at taming domestic inflationary pressure. Growth moderated and fiscal balance deteriorated due to tight monetary policy and expanded outlays. Indicators suggest that economy is turning around as core sectors and manufacturing show signs of recovery. At this juncture, it is necessary to take hard decision to improve macroeconomic environment and strengthen domestic growth drivers. Twelfth Five Year Plan to be launched with the aim of “faster, sustainable and more inclusive growth”. Five objectives identified to be addressed effectively in ensuing fiscal year. If India can build on its economic strength, it can be a source of stability for world economy and a safe destination for restless global capital. OVERVIEW OF THE ECONOMY GDP growth estimated at 6.9 per cent in real terms in 2011-12. Slowdown in comparison to preceding two years is primarily due to deceleration in industrial...
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...have health insurance or face a fine as constitutional, qualifying the provision as a tax. (Rapoza) While the commission covered by the Affordable Care Act is an imperfect system that does not mean it is not a good one. All of the minor details of the tax penalties the government will implement against those who do not have health insurance are not easy to decipher. The hospitals and health care providers feel very positive about this law because they are guaranteed patients who guarantees payment from the federal government, which should also mean premiums will go down as a result. I have no idea how people can claim that health insurers will suffer. In Massachusetts, they live under the predecessor of ObamaCare — the Massachusetts Healthcare Reform Act, signed into law by former governor Mitt Romney in 2006. (Rapoza) Under RomneyCare, 98 percent of Massachusetts’ residents have affordable health insurance. (Rapoza) Meanwhile, Massachusetts has not gone broke. Its unemployment level is currently 6 percent, better than the national average of 8.3 percent. (Rapoza) Companies are not going belly up because of RomneyCare. Private insurers operate in the state alongside the non-profit health insurers like Harvard Pilgrim and Blue Cross Blue Shield. (Rapoza) There have not been massive layoffs in the industry because of the law. According to the Annenberg Public Policy Center, the minimum tax assessment will be $695 per person and no more than $2,085 per family when the law goes...
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...information, you may be fined, be sentenced to jail or both. Student (& Spouse if married) Parent(s) (if dependent) Payments to tax-deferred pension and savings plans as reported on the W2 _____________ Form in Boxes 12a through 12d, codes D,E,F,G,H or S. ____________ Child support received for any children. This includes money you received from a non-custodial parent that is not part of a legal child support agreement. Do not include foster care payments, adoption payments, or any amount that was court_____________ ordered but not actually paid. ____________ Housing, food, and other living allowances paid to members of the military, clergy and others. Include cash payments and/or cash value of benefits received. Do _____________ not include value of on-base military housing or basic military allowance for housing. ____________ Veteran’s non-education benefits, List total amount of veterans non-education benefits. Include Disability, Death Pension, Dependency and Indemnity Compensation _____________ (DIC), and/or VA Work-Study allowances. Any other untaxed income and benefits: List the amount of other untaxed income. Include: workers’ compensation, disability, Black Lung Benefits, amounts from IRS Form 1040 Line 25, Railroad Retirement Benefits, etc. Do not include student aid, Earned Income Credit, Additional Child Tax Credit, Temporary Assistance to Needy Families (TANF), untaxed Social Security benefits, Supplemental Security Income (SSI), Workforce...
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...monthly payment will be $1,000 a month. “Great!” you think. “We can afford a house with an extra bedroom and a renovated kitchen!” Not so fast. By opting for the less-expensive mortgage, you free up $200 a month to put toward another goal. That’s $2,400 a year you could invest in a Roth IRA for your retirement, for example. In 30 years—the typical time it takes to pay off a mortgage—the $200 a month you managed to save in your Roth IRA could be worth nearly $170,000 at an average annual rate of return of 5%! Debt Mistakes to Never Make Again (cont.) pg. 1 Debt Mistakes Never to Make Again 2 Don’t charge more on your credit card than you can afford to pay off in full each month. An unpaid credit card balance is one of the worst debt mistakes. The typical interest rate charge on your unpaid balance is above 15%! That’s crazy. Limit your credit card purchases so when the bill comes you can send in a payment for the entire amount. 3 Don’t be late! Paying your bills...
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