[monikernc]

I am confused by the definition of organizational costs provided in NINJA MCQ. It appears to contradict information provided to specific questions and other sources – book, etc., the rest of the definition. The bolded section confuses me – the rest seems consistent with other info.

Organizational costs include any cost incurred in the formation of a business entity. These costs include legal fees, accounting fees, registration fees, and the costs associated with the issuance of shares of a corporation, such as promotion costs, prospectus costs, and SEC registration fees. Expenditures by a corporation related to issuing or selling shares of stock or other securities are capitalized and are not deductible organizational costs.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Tncincy]

are you asking for the definition of organizational costs?

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Tncincy]

are you asking for the definition of organizational costs?

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Credit Revenue]

Stock issuance fees are capitalized. The rest are expensed.

A - 79 expires 4/30/16 need a pass on REG
B - 78
F - 80
R - 83!!! Can live again!

[Anonymous]

Organization cost is the cost which is incident to the incorporation .
ex
temporary directors meeting expense
drafting expense of charter , bylaws
accounting and legal expense related to incorporation.
state incorporation fees.

anything related to the issue of stock, an underwriter is not the organization cost .
however syndication cost is neither capitalized nor amortized.
syndication cost is related to the sale of ownership right related to any product.

[monikernc]

Ano thank you, but that is the answer that comes up in other responses that is consistent with the mcq's but inconsistent with the defintion. I just need to make sure the definition is wrong. I looked in the IRC sections but they don't provide a list of excluded items. I would have to dig through Regulations probably. There is definitely a contradiction in the definition versus other responses to questions. If it is wrong it needs to be cleaned up.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Anonymous]

@monikernc
I don't understand what to know about the corporate reorganization topic and exempt organization and Individual credits other than what are refundable and what are not.
If you give me some guidance what should I know regarding these topics that would be great,

I asked this couple of times never get any response!!!!!!!!!!!!!!!!

[monikernc]

Ano, those are some broad topics. The answers are scattered throughout the materials. I don't have a cohesive response for you. I'm sorry. Do you have specific questions?

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Anonymous]

@moniker

the CPA exam tests this calculation very frequently: $5,,000 immediately the rest over 18months amortized reduced dollar for dollar for those over $50K. i am sure you are aware of the calculation.

they will give you a list of expenses. and you need to choose and add up the ones that are org. expenses and ignore ones that are nondeductible/nonamortizable syndication costs. usually the key words for non-deductibility is issuance/sale/marketing of securities/interests. just to correct @Ano- syndication costs ARE capitalized, they are just not amortized. they just go on the balance sheet with no benefit of being deducted (amortized) on the P&L whatsoever UNTIL the partnership's termination.

that passage you bolded is indeed confusing. the bolded items seem to be NON-organizational expenses lol, good catch.

be careful, a more complicated question will throw BOTH startup AND organizational expenses at you. the calculation is identical yet the $5K/$50K limits still apply. it will just be two separate numbers one for startup one for organizational expenses. odds are you won't see this but basically know the difference between the three: org, startup, syndication. good luck!

btw i have moved FAR into Q3 and am continuing to procrastinate on studying 😛

[monikernc]

thank you all for your help.

eesti, i hope your schedule works. i am dreading the REG sims. i think the bolded items are wrong. i got the separate calc for startup/org costs – thanks for reminding me and all the useful tips. everytime i do a biz law question i hear you saying i am wasting my time but i will need the points!!!
happy vacation!!! and beware the sims come exam time. i have no idea what these are going to look like.
monday is coming. fast!

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Tncincy]

the way you're studying….you got this.
(oh Lord, the power just went out 🙁 )

It begins with a 75
Been here too long as a cheerleader....ready to pass

[monikernc]

tncincy – i hope you were not at a prometric when the power went out.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Author]

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