Accounting Songs for CPA Exam: Death and Taxes

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VERSE 1:
IRS, the taxes amounting
Let’s go through cash basis accounting
Allowed for individuals owning a business
But corporations, they can’t get with this

Carryovers, passive activity loss
No carryback, no not at all
Investment interest expense
Is greater than investment income, yes, yea

Installment sales
Gross profit divided by contract price, that’s right
Home Mortgage Interest, we doin’ it real
Deductible on loans up to $1 mil

Business Gifts, Schedule C
$25 dollars per person, don’t ya see?
Service awards up to 400 bucks
Are deductible, yea that’s what’s up

CHORUS:
Death and Taxes, both unavoidable
Death and Taxes, both unenjoyable
You got Death, You got Taxes
The IRS always coming after

VERSE 2:
Business losses are no fun
But they only offset active business income
Like W2, yea that’s true
But Passive Losses, nah they don’t do it

Conventions, personal property
Equals mid-year divided by mid-quarter
Honestly business start-up costs can ruin my day
But at least I can deduct up to 5k

Medical expense, paid on behalf of another
Like a mother, father, or brother
Then they don’t gotta live with you
But if they more distant than a cousin, then yes they do

Foreign income and real estate tax, schedule A
They are deductible on tax day
Investment expense doesn’t include interest expense
So that I hope don’t forget

VERSE 3:
Tax audits, no statute of limitations for fraud
Or failure to file, you did wrong
Non-business bad debt, well
It’s treated as short-term capital loss, STCL

Tax refund claims
3 years of return due date or 2 years of tax being paid
Scholarships are not taxable if you took
The money and used for tuition and books