REG Study Group Q1 2017

CPA Exam Forum REG REG Review REG Study Group Q1 2017

This topic contains 1,482 replies, has 126 voices, and was last updated by  tmjcpa 7 months, 2 weeks ago.

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    Just joined this website. And I took reg for this first time this morning.

    I really have no clue how I did but hopeful I won't have to retake it!



    I test tomorrow. Praying for a passing score the first time around.


    Test Your Might.

    To keep the answers all in one place, please post in the FB thread to enter.



    I need serious help with the Securities Act. It is VERY frustrating. I just do not understand most of it. Does anybody have or uses a good source for this part?



    if I'm using the july 2016 ninja reg book, am i using the latest version or were there changes?



    For anyone with some S Corp Knowledge: What is the best way to determine what is Ordinary (Non separable Income) & Separable Income. Is the best thing to do is just look at the items on the K1 and anything not on that would be considered separable?

    Here's a question example, I just need to know where I can find how to distinguish the two because the review book doesn't quite list this but perhaps I am just looking at it incorrectly.

    An S corporation had the following income and expenses:



    Rent expense


    Entertainment expense


    Interest income


    Contributions to qualifying charities


    Section 179 expense


    Depreciation expense


    What would be reported as ordinary income on the corporation's income tax return?

    jack yassa
    jack yassa

    It's already in Becker REG3-50

    Sep Stated item is ;
    Divided Income
    Interest Income
    Capital G/L Sec 1231
    Charitable Contribution
    Sec 179
    G/L from the sale of Collectibles




    @wakefern58 Ordinary income is exactly what it is – income from operations, and expenses related to a normal course of business.
    It's income directly related to operations (manufacturing, sales, services) and expenses incurred to produce this income (salaries to employees, their insurance, office rent, normal depreciation expense of your assets used in business, repairs and maintenance, travel, meals and entertainment, advertising).

    Interest income, royalties, dividend income are both portfolio income, this income is not derived from normal operations but rather from investments.

    179 is not an “actual” expense incurred in the course of business

    Charitable contributions are not in any way related to producing your ordinary income.

    This is probably the most simplified explanations but I hope it makes sense.



    Anybody else attempting another exam at the end of this window? I'm scheduled for BEC but when I'm done with REG, I'll only have 5 weekends to study. Not sure if that is sufficient to pass but might just give at a go anyways. For those who have taken BEC, is 5 weekends doable?



    @jmg – I have FAR the last day of the testing window. Only have 1 months and half to pull it off. Don't feel discourage it can be done.



    So I stopped in to say its been quiet on here lately but apparently I stopped getting email notifications when everyone is posting! Anyone got a test this week?



    Depreciation–whether its regular, macrs, section 179, 1245 and 1250 recaptures.

    For those items, what gets lumped into ordinary income and whats separately stated? This might even change depending on if we are talking about Partnership, S Corp, C Corp…



    Capital gains and losses, Section 1231, Section 179 deduction, unrecaptured income 1250 (1245). are separately stated items



    dang, still not getting email notifications…I wonder what's wrong?

    @aatoural thanks! I'm finishing up chapter 7 and moving to chapter 8 tonight in Becker. After working through all that B-law I start to get anxiety I am forgetting my tax material. I can't seem to keep everything in my brain at once!



    Dtat – try doing at least 1 set of 20-20 mcqs on the tax material everyday you study law. THat is how I keep it fresh



    @aa yeah I should probably start doing that. I used to do a progress test weekly and for some reason I decided to try and pound through the questions and skip the progress tests all together…not a good decision for my anxiety!

    Going into your final review where are you devoting your attention? I need to find more material on estate tax. Becker doesn't provide much….Also, at risk always seems to be something that comes back and bites me and this is also something Becker touches very little on. All I can find it that the difference between basis and at-risk is at risk does not include non-recourse debt. Also, at-risk applies to partnerships, s-corps only?



    I found helpful the MCQs from GLEIM on the recourse and at risks amounts. It went into more detail than Becker.

    I was focusing Securities Acts, ethics, and CPA liability during Monday and Tuesday. I am very weak on the Acts still. Today I want to focus on AMT for both individual and Corp and then move into Estates, and trusts which I am also weak on.



    Trusts are annoying. In fact most the B-law material is annoying. Contract law and commercial paper are annoying as well. I cannot stay focused through the final 4 chapters! IT'S ALL ANNOYING AND BORING!



    To me that Becker's chapter 8 is a “no comments” area. Just when you thought you had the most random material in the BEC exam, Becker shoots this chapter 8 in REG>



    Yeah I agree, just a bunch of random material. You really just have to take a step back and look at the big picture topics, know the general rules, don't kill yourself over the small details and go with it.




    A $5,000 promissory note payable to the order of Neptune is discounted to Bane by blank endorsement for $4,000. King steals the note from Bane and sells it to Ott who promises to pay King $4,500. After paying King $3,600, Ott learns that King stole the note. Ott makes no further payment to King. Ott is:

    a.An ordinary holder to the extent of $0.
    b.A holder in due course to the extent of $4,000. — CORRECT
    c.A holder in due course to the extent of $5,000.
    d.A holder in due course to the extent of $3,600.

    Choice “b” is correct. Because the note was endorsed in blank, the note can be transferred by delivery alone; so,Ott became a holder of the note when King delivered the note to him. To become a holder in due course (“HDC”), Ott had to take the note for value, in good faith and without notice of any defense or claim on the note. Where, as here, the holder pays part of the agreed upon value and then receives notice of a defense or claim, he is considered an HDC in proportion to the consideration paid toward the agreed-upon price. Here, Ott paid $3,600 of the $4,500 agreed upon price; so, he is an HDC with respect to $3,600/$4,500 (4/5) of the $5,000 note: $4,000.



    Yeah, I remember the first time I did that question I was caught on that trick. But I've learned that with these type of questions in commercial paper I do a quick write down as I read it of the parties involved and the transfer-ability of the instrument as it moves along (bearer or order) and who qualifies as HDC. I have been getting better results since then, and I can do the questions within the 1.5 min they like to estimate per question.



    Sol and Julia Crane, both age 48, are married and filed a joint return for 2016. Sol received a distribution of $80,000 from his employer’s pension plan. In addition, Sol and Julia earned interest of $3,000 in 2016 on their joint savings account. Julia is not employed, and the couple had no other income. On January 15, 2016, Sol contributed $3,000 to an IRA for himself and $3,250 to an IRA for his spouse. The allowable IRA deduction in the Cranes’ 2016 joint return is
    A. $3,250
    B. $3,000
    C. $0 CORRECT
    D. $6,250

    I don't think I quite understand this.



    @aa what's the explanation for that question? I'm not sure either.



    The allowable deduction for contributions to an IRA is limited to the lesser of $5,500 or compensation. Compensation represents earned income and does not include distributions from pension plans or interest income. Therefore, since compensation is $0, the allowable IRA deduction is limited to $0. Note that the maximum amount otherwise deductible is $5,500 for Sol and another $5,500 for the contribution for his spouse.



    I've already forgotten all of the tax detail I review in the lectures…well at least the majority. I should be done with the lecture by the end of the week. Then I'll start on the MCQ while reviewing the book…or using the book to answer the questions. Looking back it doesn't feel that it should be too difficult, but man…it sure does feel overwhelming sometimes..more than FAR.



    So, I sit for REG on Friday. I haven't felt as lost or unprepared for any of the other exams as I currently feel for REG. Seriously, how do you remember all limits, phaseouts, etc. for all the different credits?? And I cannot keep all the basis straight…

    Any pointers? What material is best to try and cram in before Friday? I need some sort of cheat sheet.



    Just got my NTS, and want to schedule for late March – is it really this crazy with the exam changes that there are no available test slots – or has Prometric just not released dates that far out?




    The latest you can schedule in March is the 10th. The rest of the month is blacked out.


    Hey or1on23,

    To schedule an exam for BEC and REG in April (new exam), you have to do it on or after March 11th. Not sure exactly why they make it a rule. Expecting to have a big traffic.

    Check out the following link in regards to that from NASBA website:

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