June 3, 2019 at 3:26 pm #2447520
Thank you for your help!June 3, 2019 at 7:48 pm #2448228
Hi there….another AICPA Practice Exam question. The sample instructs you to select the last sentence. Is anyone able to explain to me how you get the $63,763? and the difference between IRC 1033 and 1041?
The tax basis of the land located on Wayside Street is recorded on the tax depreciation schedule at $72,563. We have reviewed the eminent domain letter from the Township of Greensburg's purchase of the Parkway Avenue property and the Combined Closing Statement for the purchase of the new property on Wayside Street. “In accordance with IRC section 1033, the new property should be recorded at $63,763 for tax purposes.”
ThanksJune 4, 2019 at 7:30 am #2449521
Hi, this one is involuntary conversion. So the first step is to figure out the amount of the gain on the property taken through eminent domain. $71,800-63,000= $8,800 deferred gain. Purchase cost of new land $72,563- $8,800 deferred gain= $63,763 basis in new land. 1033 is the section that related to involuntary conversion/deferral of gain.June 4, 2019 at 8:27 am #2449728June 4, 2019 at 6:56 pm #2451456
Hey guys, I hope y’all are all grinding hard. So yea, I have my NTS for REG. But I haven’t scheduled the exam yet. I was planning to take Reg like on July 1, but my friends are encouraging me to sit on June 10 so I don’t waste a testing window. I’ve done all the Becker videos and MCQs once through and I’ve grinded R1-R4 MCQs hard multiple times. I still have yet to take a Mock. But yea 2 of my friends said they got like 30 and 34 on their reg mocks with Becker and passed the actual. Should I sit for Reg on June 10 and grind on reg till June 19 when scores get released? I’m so overwhelmed with all the amounts, bracket ranges, and statutory amounts to keep straight. Anybody have recommendations on how to study for MCQ calcs and remembering all those #s?June 4, 2019 at 10:34 pm #2451960
@j it's really hard to say when you should take the exam. Only you know if you're really ready. Sounds like you have studied thoroughly, but only you know if you're ready. Flashcards are a good way to keep formula's straight. Most of all breathe and keep studying hard. You'll make the right decision.
I hope study is going well for all. I have had a stomach virus since Saturday. I am feeling much better, didn't get a full power weekend. But no worries, I listened to the audio and went over notes. I am going to put in a little more reading tonight. Since I'm bed bound, I need to make it count.Something is better than nothing.June 4, 2019 at 11:19 pm #2452026
J-not-GParticipantJune 5, 2019 at 9:13 am #2452971
Ok. Jeff anybody, Why can't I gain any momentum reading the book? I've tried and tried and just don't want to read this book. I need help, another answer. What else can I do to nail down the concepts.June 5, 2019 at 12:38 pm #2453463
@j-not-g they should have a breakdown of what they will change, but if the change is only a week away – start your review now because a week isn't going to make or break you.June 5, 2019 at 12:44 pm #2453475
Hi Everyone – taking REG on Monday and have a qq I was hoping someone could help with for one of the AICPA questions.
Your client, Linda Madhuri, travels locally as a self-employed IT consultant. Lina bought a new vehicle at the beginning of year 1 at a cost of $20,000. Lina did not elect to expense the vehicle under Section 179 or take bonus depreciation. The vehicle is not subject to listed property limitations. The depreciable life of this vehicle is five years, and Lina uses MACRS to calculate the depreciation for income tax purposes. Lina sold the vehicle on December 31, year 2, for $18,000. There were no other vehicle or equipment purchases in year 1. The applicable IRS standard mileage rate for business use was 58.5 cents per mile for both year 1 and year 2.
MACRS for 5 years half-year convention – yr 1 20% and yr 2 – 32%
Mileage: year 1: Personal is 5K, Business is 15K. Mileage year 2: Personal is 8K and Business is 44K
Repairs: yr 1 $3K. yr 2: $2K
Question is – Remaining basis before sale using the actual expense method since purchase in year 2?
The answer is $14,600 but I have no idea how that is being calculated.
Thank you!!June 5, 2019 at 12:59 pm #2453490
23ParticipantJune 5, 2019 at 1:04 pm #2453514
@Ali, I've seen this questions too many times. You have the wrong mileage for year 2. Should be personal 8k business 24k. Both years, the business use % is 75%.
Year 1 Depreciation: 20,000 * 75% * 20% = 3,000
Year 2 Depreciation: 20,000 * 75% * 32%/2 = 2,400
Basis= 20,000-3,000-2,400= $14,600
Half year of depreciation in Y2 since it's year of sale. Hope this helps.June 5, 2019 at 1:32 pm #2453613
@chandler – Thank you!! Yes I meant $24K, my bad. This makes sense.. year 1 depreciation is where I was getting mixed up. I believe becker says that only six months of depreciation is allowed in year of acquisition and disposition, regardless of date which it is acquired or expired so I was multiplying the $3K by 50%. So that is not the case? Just the 50% in the year it is disposed of? Sorry, there are so many nuances to everything I am driving myself crazy!June 5, 2019 at 1:39 pm #2453631
50% of depreciation in year 1 is correct, but that's already figured into the 20% (40%*/2). It makes sense if you think about it since 1st year there is always a half year taken. However, in year 2 we wouldn't want to take a half year unless we happened to have sold it, so we have to do it manually.June 5, 2019 at 2:03 pm #2453706June 5, 2019 at 4:12 pm #2454027
Need help on Becker Simulation (Chapter 1, Sim 2, Number 2)
Alice Johnson, single.
She materially participates in Downtown Developers which had an ordinary loss of ($300,000)
She also works as an independent contractor where she earned $30,000
Problem: Calculate the the taxable income/(loss)
Ordinary Loss at Downtown Developers ($300,000) + Ordinary business income at independent contractor $30,000 = $270,000
Because she is single, the threshold of excess business losses is $250,000
Thus, $270k – $250k = $20k carryforward.
How did Becker calculate taxable gross loss of $280k for Downtown Developers???June 5, 2019 at 5:01 pm #2454105
@tncincy, try reading the Ninja Notes for each chapter and then doing a bunch of MCQ's for it. like a lot of them. then read the answer/explanation for each question and it will kind of force you to read but it will be better than just trying to read a book since you'll be applying it to a real question.June 5, 2019 at 5:32 pm #2454159
I have another one. I honestly am about to have a breakdown because this should be very straightforward and I'm not getting it. They want us to calculate Hook's taxable income below.
Hook Corp., a calendar-year C corporation, reported the following Year 2 financial information:
Net income per books $210,000
Federal income taxes per books 114,000
Tax depreciation in excess of book depreciation 66,000
Charitable contributions per books 46,000
Thank you guys for your help!!June 5, 2019 at 5:43 pm #2454210
210k+114k-66k+46k = 304k taxable income before charitable contributions
Charitable contribution is limited to 10% of TI, or 30,400.
304,000 – 30,400 = 273,600
Good luck on Monday!June 5, 2019 at 5:45 pm #2454219
@ali Take the book income 210,000
add back the federal income taxes 114,000
deduct some additional depreciation (MARCS – tax dep) in excess of SL (book dep) (66,000)
add back the charitable contribution because you are only allowed 10% under corporation 46,000
you have 304,000
then deduct the 10% of AGi allowed for charitable contributions = 30,400
RESULT = 273,600
Taking REG on monday too. Good luck to us!June 5, 2019 at 5:56 pm #2454243
@23 and @sidieuleveut – Thank you for your help!!!! I am getting so freaking confused with everything. I was taking the 210+114-66= 258 and was taking 10% off of that. I didn't realize that I needed to add back the 46K too. I have ZERO tax experience and this is my last test and BY FAR the hardest for me to grasp and understand. I feel like I am not retaining anything.June 5, 2019 at 6:00 pm #2454270
@Ali its so confusing at times. So many little tiny exceptions. Good luck on your last exam and congrats on your previous 3. Im SO jealous 🙂
We have a whole weekend to “perfect” our understanding so we can have priority over passing this exam. See what I did there (clearly spent some time on attachment and perfection of security interests haha)June 6, 2019 at 9:12 am #2455779
Taking Reg today 2:00 PM. Gotta work around the hail storm so my car doesn't get dents in it while I'm taking it.June 6, 2019 at 9:52 am #2455941
Need help with another AICPA question if someone can 🙂
A retiree invested $100,000 in an annuity that pays $12,000 annually for 10 years. What portion of the
first payment should be included in the retiree's gross income?
Becker really only shows how to calculate annuity if you know the payout period and the age of the retiree.
Thank you!!June 6, 2019 at 12:31 pm #2456295
@Ali I'm not sure what the answer is – maybe it has to do with this: I am assuming it has something to do with $12,000 annual pay out * 10 years = $120,000. 120,000 less original price of 100,000=$20,000.June 6, 2019 at 12:54 pm #2456346
@74phoenix The answer is $2,000 and i literally had no idea how they got there until you just showed that. So I assume that you amortize the $20K over the 10 years to get to $2K that should be included in gross income in year 1? Seems reasonable to me… hahahaJune 6, 2019 at 1:07 pm #2456385
I think the correct way to get this answer is $100,000 / 10 years = 10,000 per year. Payment of 12,000 less than 10,000 is $2,000.June 6, 2019 at 1:10 pm #2456388
only the interest portion needs to be included in gross income. so if you're getting paid $12k over 10 years then you're getting $120,000 when you only invested $100,000, so $20k is interest. $20k over the 10 years is $2k per year.
or you can think of it as… you're getting paid $12k a year for 10 years when you invested $100k which would break down to $10k per year investment. so the $12k per year less the $10k per year (“principal”) would leave you with $2k of interest.June 6, 2019 at 8:34 pm #2457402June 7, 2019 at 11:04 am #2458866
Well, well….It's power weekend again. I am in for long haul study. I am feeling much better. Looked at the calendar and don't want time to get a way. I will be prepared this time around, so I am incorporating the prior suggestions with my 100 mcq per day regime. I am starting with re-writing ninja notes this morning/afternoon since I won't be working and then move into mcq. I will be posting my hard questions for help so check-in guys. Hope study is going well. Good luck to those sitting soon. 🙂
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