REG Study Group Q4 2014 - Page 123

Viewing 15 replies - 1,831 through 1,845 (of 4,354 total)
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  • #631005
    Anonymous
    Inactive

    Bern Corp., an S corporation, had an ordinary loss of $36,500 for the year ended December 31, 2014. At January 1, 2014, Meyer owned 50% of Bern's stock. Meyer held the stock for 40 days in 2014 before selling the entire 50% interest to an unrelated third party. Meyer's basis for the stock was $10,000. Meyer was a full-time employee of Bern until the stock was sold. Meyer's share of Bern's 2014 loss was

    A. $0

    B. $2,000

    C. $10,000

    D. $18,250

    #631006
    OneGiantWarrior
    Participant

    @taxlady

    Most my struggles are in agency, surety, and secured transactions (determining who's liable in certain situations)

    I'd love to join in on a session for business law when you guys get there!

    #631007
    Tax lady
    Participant

    I'm going with C because Meyer didn't have enough basis to use the full loss.

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

    #631008
    Tax lady
    Participant

    @OneGiant Sounds good!

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

    #631009
    taxgeek83
    Participant

    I don't know if this has been addressed, but S corps can have accumulated e&p if they were previously a C corp. There are some quirky additional taxes that can result if the corporation makes the S election and hordes (i.e. fails to distribute) any accumulated earnings, but I'm not sure if it's within the scope of this exam. I haven't gotten quite that far yet.

    Here's a decent article about it:

    https://www.aicpa.org/publications/taxadviser/2014/january/pages/nitti_jan2014.aspx

    #631010
    Anonymous
    Inactive

    It's B – Meyer's share of Bern Corp.'s 2014 loss should be Meyer's pro rata share of the corporation's income. Since Meyer owned 50 percent of Bern Corp. for the first 40 days of Bern Corp.'s tax year, Meyer's portion of the loss would be $2,000 (= 50 percent ownership* (40 days/365 days) * $36,500 ordinary loss). Meyer's share of the corporation's loss is dependent on his/her ownership percentage, It is unaffected by Meyer's being an employee of the corporation.

    #631011
    WANNABE_CPA
    Member

    @Bucky …$2000

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    #631012
    WANNABE_CPA
    Member

    yuhooo..i am getting S corp now…little bit 🙂

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    #631013
    Tax lady
    Participant

    Dang! I forgot to factor in the days. I'm so bad about missing that in problems.

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

    #631014
    Tax lady
    Participant

    Do you have another one like that handy?

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

    #631015
    Anonymous
    Inactive

    As of January 1, 2014, Kane owned all the 100 issued shares of Manning Corp., a calendar year S corporation. On the 40th day of 2014, Kane sold 25 of the Manning shares to Rodgers. For the year ended December 31, 2014 (a 365-day calendar year), Manning had $73,000 in nonseparately stated income and made no distributions to its shareholders.

    What amount of nonseparately stated income from Manning should be reported on Kane's 2014 tax return?

    A. $56,750

    B. $54,750

    C. $16,250

    D. $0

    #631016
    WANNABE_CPA
    Member

    Baker an individual , owned 100% of alpha, an S corp. At teh begining of the year , Bakers basis in alpha was $25000. Alpha realized ordinary income during the year in the amount of $10000, and a long term capital loss in amount of $3000 fo this year. Alpha distributed $30000 in cash to Baker during the year. What amount of the $30000 cash distribution is taxable to baker?

    A 5000

    B 30000

    C 7000

    D 0

    FAR : 68, 74, 83 Thank you God 🙂
    BEC : 78 (8/27) 🙂
    REG : 72 ,80 (2/25) 🙂
    AUD : 69,67, 07/23

    #631017
    Tax lady
    Participant

    @Bucky A (73,000/365 = 200; 40*200 = 8000*100%=8,000; 324*200 = 64,800*.75 = 48600; 48600+8000 = 56,600 = closest to A)

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

    #631018
    Anonymous
    Inactive

    @Wannabe – I get $2000. What am I doing wrong?

    #631019
    Tax lady
    Participant

    @wannabe = D Did not exceed basis

    AUD - 80
    BEC - 75
    FAR - 85
    REG - 82

    REG 8/15/14 (73); 11/13/14 (82)-expired 🙁
    AUD 5/30/15 (80)
    BEC 11/28/15 (75)
    FAR 7/30/16

    Studying with CPAexcel and Ninja notes/MCQ's/Flashcards

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