REG Study Group January/February 2013
January 12, 2013 at 1:42 am #401086
Wow, thanks. I feel a lot better now.
I will definitely say anything I can when I’m done with the examJanuary 12, 2013 at 6:40 pm #401087
I don’t understand the answer to the following question and would really appreciate some clarification:
Axis Corp. is an accrual basis calendar year corporation.
On December 13, 2012, the Board of Directors declared a two percent of profits bonus to all employees for services rendered during 2012 and notified them in writing. None of the employees own stock in Axis.
The amount represents reasonable compensation for services rendered and was paid on March 13, 2013. Axis’ bonus expense may
A. Not be deducted on Axis’ 2012 tax return because the per share employee amount cannot be determined with reasonable accuracy at the time of the declaration of the bonus.
B. Be deducted on Axis’ 2012 tax return.
C. Be deducted on Axis’ 2013 tax return.
D. Not be deducted on Axis’ tax return because payment is a disguised dividend.
The correct answer is : B. Be deducted on Axis’ 2012 tax return.
And the reason why is:
While cash based taxpayers deduct deferred compensation in the tax year that the compensation is actually paid to employees, accrual basis taxpayers deduct deferred compensation in the tax year that the liability to pay the compensation becomes fixed. The liability to pay the deferred compensation becomes fixed when:
1) all events have occurred to establish the liability to pay the compensation;
2) economic performance has occurred with respect to the liability; and
3) the amount can be determined with reasonable accuracy. In addition, accrual based taxpayers must pay the deferred compensation within the first 2 1/2 months of a tax year to deduct the compensation in the preceding year.
This response correctly indicates that Axis’ bonus expense would be deducted on the corporation’s 2012. All the events occurred to establish the liability for the bonuses when the corporation declared the dividends and notified the employees. The bonuses are for services rendered in 2012, indicating that economic performance has occurred with respect to the liability, and the amount of the bonuses can be determined with reasonable accuracy. Paying the dividends on March 13, 2013 is within the first 2 1/2 months of the close of Axis’ 2012 tax year. Hence, the liability to pay the dividends became fixed in 2012 and they were paid within the first 2 1/2 months of the 2013 tax year.
I think the answer should be that it can be deducted on the 2013 tax return. I don’t understand how March 13,2013 is within 2 1/2 months of the end of the 2012 tax year. I think that the cutoff for the 2 1/2 months would be February 15, 2013 and March is clearly after that.
Can anyone help explain this?January 12, 2013 at 6:46 pm #401088
January – 1 month
February – 1 month
March 15 – 1/2 month
add it all together and you get 2 & 1/2 months, therefore March 13 is before the 2 & 1/2 month point so it can be deducted in 2012.
Hope this clarifies.January 12, 2013 at 6:50 pm #401089
I don’t like to remember those types of things as “two and a half months” and likewise. It does make it somewhat confusing.
I’d rather just remember it as “as long as they pay it by the filing deadline”January 12, 2013 at 7:00 pm #401090
Thanks. I don’t know why that wasn’t clicking but I like the idea of just thinking of it as the filing deadline.January 12, 2013 at 8:07 pm #401091
Hey everybody. I’m taking REG on Monday for the second time. It is my final test to be through with this headache. How’s everybody doing?
I’m getting super anxious about all the little details floating around in my head. Everytime I pause and I ask myself “what do I know for sure?”, I feel like I’m in a storm of information…
Positive vibes for all of you guys!January 12, 2013 at 8:08 pm #401092
Working on redoing R8 homework right now. I’m doing well on it but I have a long way to go. I’m starting to think that this is a complete mismanagement of my time and I should ditch the need to rework every Becker program and start hammering important stuff that I don’t feel great on.
Edit: I also regret not doing a good job marking every question I wanted to understand more about later. Lesson learned big time.January 12, 2013 at 10:16 pm #401093
So a few of my friends tried to convive me to give up on trying to get finish this CPA challenge. I have not given and today did Reg for # 4 times. Can you imagine ? they think I am nuts !!
REG ( 74, 74, 73 )
BEC (84 )
AUD (77 )
FAR ( Feb 13 )January 12, 2013 at 11:09 pm #401094
Don’t give up. However, if my FAR expires before I pass REG… I might give up. hahaJanuary 13, 2013 at 4:18 am #401095
Might have been a huge mistake – but I took all day today off to clear my head. I put in between 5-9 hours each day Mon-Fri so hopefully this day off helped repair my brain. Waking up tomorrow and Monday at 7am for 10 hour days :/ I received some Adderall from a friend so going to try those out.January 13, 2013 at 8:30 am #401096
Alrighty. One more question that’s eating away at my soul. This one is from Final Exam #1
Skipper Family trust, a simple trust, blah blah find DNI
Ordinary income from rental properties (gross) 5000
Taxable Dividend Income 1500
Interest income from corp bonds 1000
Interest income from tax exempt.. 500
Rental expenses 2500
Trust fees allocable to income 1000
Trustee fees allocable to corpus 500
Calculation for the correct answer is as follows
plus 500 nontaxable income
minus 500 trustee fees to corpus
Final answer: 4000
My question is…why are the trustee fees allocable to corpus included in that computation? Shouldn’t anything involved with corpus not be considered in trust? Is it only income corpus items not included? Is this a special case because it’s a trustee fee? I have no idea why that counts as a deduction.January 13, 2013 at 5:32 pm #401097
Also interested in that answer cus I thought corpus items weren’t included in DNI as well. I’ll do a google search in a bit if no one replies.January 13, 2013 at 5:33 pm #401098
meatball – what time is your exam and what’s your timezone?
Mine’s at 1pm PST – but last time I went 45 min early and they let me start then.January 13, 2013 at 7:54 pm #401099
11:30 eastern, I’ll probably get there early as well. I’ll be done by the time you start 😮January 13, 2013 at 8:28 pm #401100
I know this thread has turned into mypetmeatball.livejournal.com but I just completed the second Becker final exam.
Testlet 1: 75
Testlet 2: 87
Testlet 3: 67
Partnership Distribution 92
K-1 S Corp 100
Form 1040 Line Items 60
Research 0 (should be 100, again)
First thing’s first, what the hell is going on with this Becker research?!?! This is the second time I put in the correct section and subsection and did not get credit. Should I be worried?
Secondly, this was pretty damn hard. The part that is KILLING me is the basis simulation. It was, by far, the easiest simulation. When I was adding liabilities to the basis of the separate partners, I f’ing forgot to take into account their ownership percentage. That’s the kind of thing that really really worries me, I get so damn lazy towards the end of the exam. That’s a heinous error that could end up being the difference between passing and failing..I better not do something like that on the exam.
My brain hurts. I need to take an hour off and breathe some fresh air. Then I’ll review my exam to see what other terrible mistakes I made and then get the 24 hour Wiley trial.January 13, 2013 at 9:43 pm #401101
Does anyone know if there is a way to increase the play-back speed on the becker review lectures? Had the bright idea on Saturday of “winging-it” on REG and signed up to take the test on Friday (1/18/13) — just started studying this weekend. With a shortened time-frame and the fact that I have work all week, it would be nice to make Tim Geraghty speed up a little…can’t seem to find any settings available on the software though.
Also — any tips for areas to focus on??
A – 76
B – 76
R – 1/13
F – 2/28January 13, 2013 at 10:02 pm #401102
I am not quite there yet, but did anyone have the same problem as ‘mypetmeatball’ regarding the research question? Any insight on helping ‘mypetmeatball’ as to what’s going on?
Did you contact Becker on this issue? It would be interesting to hear what they have to say. I had an issue with the software for FAR as I was not able to delete an entry once I added the account in there. I was freaking out as I was thinking…’what if I want to change the account as I discover it’s not correct?’ I checked with them and it was a software issue. Sure enough…at the exam I was able to delete and add different accounts according to my desire…So…at this point, if you know you had the correct answer, go forward with courage!!!January 13, 2013 at 10:51 pm #401103
Is there a way to grade the Becker sims within each chapter? I found the solution and checked myself, but I see some people listing % on here.January 14, 2013 at 12:59 am #401104
I think the % come from doing the final exam practice.
I downloaded the Wiley test bank for REG and do not think the wording of the questions matches the actual test very well. I took the exam back in November and the questions were much closer to the wording in Becker.January 14, 2013 at 1:28 am #401105January 14, 2013 at 2:24 am #401106January 14, 2013 at 2:37 am #401107
i just started studying for REG taking it FEB 26. enough time?January 14, 2013 at 3:50 am #401108
Definitely – I began studying Dec 3 or so (was going to take it Jan 5, but moved it to the 15th) and with the holidays, I wasn’t studying everyday until Jan 2. I think you will be fine!January 14, 2013 at 5:16 am #401109
how did you do on FAR? There’s just so much information. UGH. Any suggestions on how to study for REG? Thanks!January 14, 2013 at 6:25 am #401110
Didn’t pass, was close. I wasn’t taking it seriously and thought I could get away with going out and keeping my same life – NOPE!
REG, I am using Roger and he has pre-made study schedules, so I made an Excel spreadsheet and went off his and made my own schedule. I typed up notes in Word as I watched the videos (FAR I highlighted the entire book basically, not useful) I also did a bunch of probs on Wiley test bank, but not for all chapters. Started major studying last Monday doing one section at a time fully (there are 6 for Roger), doing all MCQs in Wiley book as well. I’ll finish tomorrow with Corporate/Partnership Tax and continue doing as many testbank MCQ as possible.
Sorry if this is a bit jumbled, had a 15 hour day today :XJanuary 14, 2013 at 7:09 am #401111January 15, 2013 at 12:13 am #401112
I just returned from taking REG. Every topic was equally covered. It’s scary how much material you have to know. I wished I had spent more time evenly studying between Tax and BLaw.January 15, 2013 at 1:35 am #401113
@m1 – yeah, I recommend it. It’s nice for when you’re just hanging around watching tv/in bed and can practice with instant, easy feedback instead of a huge book and turning pages.
@apple kinda good to hear – I studied biz law/tax equally it seems and was regretting spend so much time on biz law til now. Now I am losing my mind – are the Becker questions from the Wiley book or do they have their own?January 15, 2013 at 2:50 am #401114January 15, 2013 at 2:57 am #401115
@samdieog – I don’t know what the questions look like in the Wiley book. I only tried the Wiley online test bank. The online test bank was way different and a lot harder. If you were a master of the material, Wiley would probably be the icing on the cake. But if you just want to pass, it’s probably overkill.
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