TCP Drill

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C corporations

• Flat 21% rate. Dividends received deduction: 50% (under 20% owned), 65% (20% to under 80%), 100% (80%+).
• Schedule M-1 starts from book income: add back federal tax, fines and 50% of meals; subtract tax-exempt interest.
• Section 351: no gain if transferors control 80%+ after the exchange, except to the extent of boot.

Partnerships and S corps

• Partner basis: cash + adjusted basis of property − liabilities relieved + share of partnership liabilities.
• Basis order each year: increases, then distributions, then losses. Losses beyond basis are suspended.
• S corporation: up to 100 shareholders, one class of stock, no corporate, partnership or nonresident alien shareholders. No basis for entity debt.

Gifts and estates

• Each recipient gets an annual exclusion. Tuition and medical paid directly, gifts to a citizen spouse and gifts to charity are excluded or deducted.
• Gross estate: everything owned at death, revocable trusts, life insurance owned or transferred within 3 years, half of spousal joint tenancy.

Individual planning

• Net investment income tax: 3.8% of the lesser of NII or MAGI over $200,000 single / $250,000 joint.
• Active rental participants: up to $25,000 of losses, phased out by 50% of MAGI over $100,000.

Inflation-indexed amounts, like the annual gift exclusion, are given in the question.