CPA Reviewed #73 – Items Not Deductible on Schedule K

23 Jan 2017


CPA Reviewed #73: Monday January 23, 2017

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1. Tracy – Congrats on the new baby!! Your wife is a trooper!

I am taking REG again for the 5th time in February…got a 69 in July and 70 in December.

On the Ninja Notes, in the partnership section it says the below:

    Items not deductible on Schedule K
        Instead these flow through the Partners' K-1:
            Investment interest
            Foreign taxes paid
            Charitable contributions
            179 expense

But on an actual Schedule K those items are deducted. What am I missing?

Gross Sales

(Except for partners)

(Accrual basis only)
(payments to partners are OK)
(except 179)
= Ordinary Business Income

Instead, these flow to Partners' K-1
o Investment Interest Expense
o Foreign Tax Paid
o Charitable Contributions
o 179 Expense
Mnemonic: IFC179

Instructions for Form 1065

Do not include any section 179 expense deduction on this line. This amount isn't deducted by the partnership. Instead, it is passed through to the partners in box 12 of Schedule K-1.

Items the partnership must state separately that require separate computations by the partners. Examples include expenses incurred for the production of income instead of in a trade or business, charitable contributions, foreign taxes paid or accrued, intangible drilling and development costs, soil and water conservation expenditures, amortizable basis of reforestation expenditures, and exploration expenditures. The distributive shares of these expenses are reported separately to each partner on Schedule K-1.

2.Jared – I purchased Ninja MCQ for BEC and I have been doing the adaptive learning session. After 400+ questions, I have been seeing repeated questions, even repeated questions that I have answered right before.

Should I just go to Custom MCQ and just select Questions that I have not yet seen?

I don't want to stray away from what is recommended.

3. Rachel – Hi Jeff, I purchased the NINJA FAR book in Oct/Nov of 2016. ( i missed it by 4 points). Can I use this for the new CPA style or will you be updating you materials? Thanks

4. Shalini – I have only recently decided to pass the CPA exams. A friend lent me books from 2013. How redundant or useful are they? Some subjects more than others?

5. Juan – I will be taking the Regulation exam in 2 weeks and I am considering purchasing the ninja MCQ. However, I was wondering if I can still access the 2016 REG questions since my exam will consist of that material, or are only the 2017 questions provided?

See Also: How to Pass a Section of the CPA Exam in 20 Days

6. Andrea – I failed one of the other sections of the CPA exam and I have to push Regulations back from March 10th to the first week of April. However when I’m on Prometric all the days in April, May and June are in light gray- so it won’t let me reschedule my exam.

Then I saw an email from NASBA that said if you want to take BEC or REG on or after April 1, 2017 the earliest you can schedule is March 11, 2017.

However if I’m scheduled to take Regs on March 10th and the earliest time we can schedule for Regs is March 11th, how can I reschedule it? If I select cancel exam on the Prometric website, will I have to pay for the exam all over again?

7. David – Hi for the ninja Notes, If i buy a 2017 version of the notes for FAR, lets say I take FAR again in 2018, will I get a free copy of the NINJA notes for FAR 2018?

8. Neil – I purchased the Ninja notes for BEC. I now want to buy the Ten Point Combo. Will you offer a credit for the notes towards purchase of the combo? I plan to use Ninja for my remaining three sections.

9. Earla – Thanks for the email. Congratulations on your new baby boy! I believe each child is different. My late father came from 18 children with just the same mother and father. Living in a farm with a big family is nice and perfect.

As to my exam review, I believe it doesn't matter what review course I have, if I don't have time and focus on following through, I will never pass. So far, my AUD in Oct 2016, got 69% (did the Ninja materials 60%). My latest, FAR, got 59% (did the Ninja materials 50%). 

Brace yourself, but I am scheduled to write 4 sections in March 2017. As a Canadian, I am limiting myself to crossing the border to a minimum, except of course if the 18th months threshold is on the line.

Basically, I definitely have to to pack most 4 sections materials w/in 6 weeks.

10. Hi, I am international CA and need to clear IQEX exam. Do you provide study material for IQEX?

See Also: How to Pass the CPA Exam

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