[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for REG.

“Death and Taxes” – Individual Tax for the CPA Exam

Posted by Another71 on Monday, November 24, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[Anonymous]

Thanks @anjanja! That's what my guess was too.

[imgonnabacpa]

@anjanja! & @Atlantic1984 ; i think the corp's basis in the prop would be 75 but dole's basis be 35 based on the the NBV concept as there is no gain and not taxable case. Why did you you mention Basis +gain -csh recd concept as in like kind exchange. Isn't this sec 351- no gain on prop tfr concept then how did this $40K gain come from.?

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Anonymous]

Also…I am getting really worried about this test, especially SIMS. I don't know if I can ever be prepared for this test 🙁

[Anonymous]

imgonnabacpa,

what's NBV? I am using Roger's book for reference, he has this little chart for basis of property for both shareholder and corp.

I only remember basis + gain – cash received for shareholder, because i had to look it up few time, but it's actually = adj basis+ recognized gain + cash paid +liab assumed + transaction cost and fees – cash received – FMV of property received – liab transferred. For corp adj basis for transferor + gain recognized by transferor. Good luck memorizing this!

[imgonnabacpa]

@ Anna : Oops with NBV I meant to write Bsis only.

I agree with this formula that you have given but this is for property exchange . Right?

The bove question with Dole, A sole owner..of __Corp…… Does it mean that Dole was a sole propertier and thus the Gain and loss rules as in FMV-basis apply or is it a corporation question ? If so then I think we would not have gain or loss as it is >80% ownership case… HOw would you recognise & differentiate.?

I think I am getting too stressed to think for my exam on Monday.

God ! Please help me in this 3rd and final try of REG.

Thanks

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[imgonnabacpa]

Hey Becker students,

Could anyone help me understand what they are asking in the REG SiM3-04 ( taxable income and Current E&P)

Why do we need to add the value of taxable income 100000 and adjust for the calculation of current E&P

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[Anonymous]

Do you mean like kind exchange?

No, that formula is for basis of property for 351. Unless I am way off. Anyone?

Here, see under h cross references and b https://www.law.cornell.edu/uscode/text/26/351

[jstay]

business law and ethics all day

[Anonymous]

@jstay I was thinking of doing blaw and ethics all day to. I think I'm going to skim r5-8 and make charts to help me understand the differences. Then I'm going to do ninja blaw section only! See how I do 🙂 what's your plan?

[jstay]

hopefully 3 72 question progress tests today with some reading later and then ill probably start going straight through r5-r8 tomorrow. im also of skimming through the r1 & r2 sims later tonight if time permits. about to start the second progress test now

[imgonnabacpa]

Can someone please explain the treatment of depreciation wrt home owner's gain exclusion.

Munch has used his residence, which he bought 10 years ago, for business purposes. He has taken depreciation deductions since he bought the home. When he sells his home in May 2014, his profit is $150,000, $5,000 of which is attributable to depreciation for the period after May 6, 1997. Which of the following is a true statement?

Incorrect A.

The depreciation deductions do not affect his exclusion.

B.

Fifty percent (50%) of the depreciation deductions reduce the amount of his gain eligible for the exclusion.

C.

Only depreciation deductions attributable to post-August 5, 1997, reduce the portion of his gain eligible for the exclusion.

D.

$5,000 of his gain does not qualify for the home sale exclusion.

Answer :

A homeowner can claim depreciation deductions if he or she rents out part of the principal residence to others or uses part of it as a qualifying home office. These depreciation deductions reduce the owner's basis in the home and thereby increase the gain realized when the home is sold. Under '97 TRA, the home sale exclusion is not available for that part of the home sale profit created through depreciation deductions. However, this rule only applies to the extent of depreciation claimed for post-May 6, 1997, periods. In other words, any depreciation taken after May 6, 1997, will be taxed upon the sale of the residence.

BEC - 78
AUD - 69,72,78
FAR - 73, 77
REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

[RTCPA]

hi

can any one explain this to me, why if the return filed on april 1st is treated as on april 15?

bellow is the question

Ben Carr, a calendar-year taxpayer, was 65 years old on December 30, 2014. Ben filed his 2014 individual income tax return on April 1, 2015, and attached a check for the balance of tax due as shown on the return. On July 15, 2015, Ben realized that he had inadvertently failed to claim the additional standard deduction to which he was entitled by virtue of having attained age 65 in 2014. In order for Ben to recover the tax that he would have saved by claiming the additional standard deduction, he must file a refund claim no later than

December 31, 2015.

April 1, 2018.

April 15, 2018.

August 15, 2018.

This answer is correct. A taxpayer must file a claim for refund within 3 years from the date a return was filed, or 2 years from the date of payment of tax, whichever is later. If a return is filed before its due date, it is treated as filed on its due date. Thus, the taxpayer’s 2014 calendar-year return that was filed on April 1, 2015 is treated as filed on April 15, 2015. Therefore, a claim for refund must be filed no later than April 15, 2018.

[Anonymous]

The president of Deal Corp. wrote to Boyd, offering to sell the Deal factory for $300,000. The offer was sent by Deal on June 5 and was received by Boyd on June 9. The offer stated that it would remain open until December 20. The offer:

A.

constitutes an enforceable option.

B.

may be revoked by Deal any time prior to Boyd’s acceptance.

Incorrect C.

is a firm offer under the U.C.C. but will be irrevocable for only three months.

D.

is a firm offer under the U.C.C. because it is in writing.

When is the answer B verses C. I'm confused!!!

[jstay]

@cpa8488, he is selling a factory so its real estate therefore it is common law. it can be revoked anytime prior to acceptance unless boyd paid to keep it open (called an option contract?). You went with C which is for UCC the sale of goods. i think you may have gotten confused on a firm offer (make sure you know the requirements!!)- offer to buy or sell goods, made by merchant, needs to be signed. time need not be stated (if not stated go with 3 months), also consideration is NOT required.

[RTCPA]

hi

can any one explain this to me, why if the return filed on april 1st is treated as on april 15?

bellow is the question

Ben Carr, a calendar-year taxpayer, was 65 years old on December 30, 2014. Ben filed his 2014 individual income tax return on April 1, 2015, and attached a check for the balance of tax due as shown on the return. On July 15, 2015, Ben realized that he had inadvertently failed to claim the additional standard deduction to which he was entitled by virtue of having attained age 65 in 2014. In order for Ben to recover the tax that he would have saved by claiming the additional standard deduction, he must file a refund claim no later than

December 31, 2015.

April 1, 2018.

April 15, 2018.

August 15, 2018.

This answer is correct. A taxpayer must file a claim for refund within 3 years from the date a return was filed, or 2 years from the date of payment of tax, whichever is later. If a return is filed before its due date, it is treated as filed on its due date. Thus, the taxpayer’s 2014 calendar-year return that was filed on April 1, 2015 is treated as filed on April 15, 2015. Therefore, a claim for refund must be filed no later than April 15, 2018.

[Author]

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