REG Study Group Q1 2015 - Page 67

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  • January 18, 2015 at 5:46 pm #652036
    funtiks
    Participant

    FAR - 76*, 73, 85
    BEC - 69, 72, 78*, 80
    AUD - 72, 71, 90
    REG - 71, 74, 85

    AFTER 3 YEARS I'M DONE!!!

    January 18, 2015 at 5:46 pm #652037
    funtiks
    Participant

    I hate how Becker words things….

    Going over estates:

    “DNI is limitation on amount trust or estate can deduct”

    So im thinking okay, anything over DNI is taxable while DNI is deductible.

    NOPE!!! anything over DNI is deductible while DNI is taxable….

    cant believe this review course cost 3k

    FAR - 76*, 73, 85
    BEC - 69, 72, 78*, 80
    AUD - 72, 71, 90
    REG - 71, 74, 85

    AFTER 3 YEARS I'M DONE!!!

    January 18, 2015 at 5:56 pm #652038
    s2sylvir
    Member

    @WantThatCPA

    LOL, yeah… I didn't even read the question I was just affirming B… I just read the other options and they are also indeed true…. Well, if B is wrong, then I'm going to wonder why? Is it that it should be 100% of current year's liability? If that's the case, Becker definitely did not tell us this in their notes…

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 18, 2015 at 6:00 pm #652039
    s2sylvir
    Member

    @WantThatCPA

    Per the IRS: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estimated-Taxes

    Who Does Not Have To Pay Estimated Tax

    You do not have to pay estimated tax for the current year if you meet all three of the following conditions.

    •You had no tax liability for the prior year

    •You were a U.S. citizen or resident for the whole year

    •Your prior tax year covered a 12 month period

    I was actually thinking about corporations… Maybe this is true for individuals (I already forgot everything lol)

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 18, 2015 at 6:06 pm #652040
    Gabe
    Participant

    Farr, an unmarried taxpayer, had $70,000 of adjusted gross income and the following deductions for regular income tax purposes:

    Home mortgage interest on a loan to acquire

    a principal residence $11,000

    Miscellaneous itemized deductions above the

    threshold limitation 2,000

    What are Farr's total allowable itemized deductions for computing alternative minimum taxable income?

    A.

    $0

    B.

    $2,000

    C.

    $11,000

    D.

    $13,000

    OK…AMT…so itemized deductions are TIMME

    taxes

    interest

    medical deductions- >10% AGI

    misc deductions- >2%

    exemptions

    WHY isn't the $2k allowed?! It is a misc deduction above 2% threshold. Also, I thought the only interest you DIDN'T add back was mortgage interest to buy, build or improve your home. Someone please clarify this is driving me nuts.

    CPA, CFE
    CISA- Experience will be completed by August 2016

    January 18, 2015 at 6:08 pm #652041
    Gabe
    Participant

    @wantthat Per Google (lol):

    It's the lesser of

    1)90% of current year tax or

    2)100% of last year tax

    so as long as there's no tax liability for last year(zero) he dosen't have to pay estimated tax cause it's the lesser of 1 or 2

    provided that last year was a whole 12 month year

    CPA, CFE
    CISA- Experience will be completed by August 2016

    January 18, 2015 at 6:11 pm #652042
    s2sylvir
    Member

    @Gabe

    The medical subject to 10% and the itemized subject to 2% are slightly different.

    For medical AMT purposes, amounts above 10% of AGI floor are deductible. For AMT purposes, an individual taxpayer cannot deduct miscellaneous itemized deductions subject to the 2% of AGI floor whatsoever.

    Also, the question asks for are allowed for AMT, and thus, as you stated, mortgage interest for the home is allowable.

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 18, 2015 at 6:12 pm #652043
    Anonymous
    Inactive

    Edited: I thought you are required to pay estimated tax if the minimum tax liability is $500, not $1000?

    January 18, 2015 at 6:13 pm #652044
    s2sylvir
    Member

    @CPAby2015

    $500 is for corporations, $1000 is for individuals

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 18, 2015 at 6:15 pm #652045
    WantThatCPA
    Member

    @sylvir @gabe If you guys are using Becker refer to R3-27 vs. R2-54. The rule that was in my head was only for corporations estimated tax rules. Individuals may use either even if their prior year tax liability is zero. These rules are driving me nuts!

    January 18, 2015 at 6:16 pm #652046
    Anonymous
    Inactive

    Thanks s2sylvir! Ugh! Too many rules…

    January 18, 2015 at 6:17 pm #652047
    s2sylvir
    Member

    @WantThatCPA

    Yes! My gripe exactly. I just took the exam yesterday and I know I already got 2 questions wrong because I was thinking from the corporate perspective rather than individual… Good thing you've caught it >.< I should probably start studying for REG again…. I already feel I failed T_T

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    January 18, 2015 at 6:17 pm #652048
    Gabe
    Participant

    Thanks @s2sylvir. I remember seeing questions where >2% misc was used in the AMT computation. Is it never used?

    CPA, CFE
    CISA- Experience will be completed by August 2016

    January 18, 2015 at 6:18 pm #652049
    WantThatCPA
    Member

    @gabe you are thinking of it backwards. home mortgage interest is allowed for AMT which is why it isn't included in the calculation for AMT and the misc. in excess of 2% isn't allowed which is why it gets added during the calculation of AMT.

    January 18, 2015 at 6:18 pm #652050
    Gabe
    Participant

    @s2sylvir I'd take a break, everyone thinks they've failed when coming out of the exam :/

    CPA, CFE
    CISA- Experience will be completed by August 2016

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