REG Study Group – Q1 2018 - Page 11

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    Topic
  • December 11, 2017 at 10:58 am #1676693
    jeff
    Keymaster

    Welcome to the Q1 2018 CPA Exam Study Group for REG. 🙂

    Introduce yourselves and let your fellow NINJAs know when you plan to take your exam.

    The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

Viewing 15 replies - 151 through 165 (of 428 total)
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  • January 8, 2018 at 6:46 am #1690799
    Lentilcounter
    Participant

    I would also look over SIMs on individual, property, and entity taxation.

    BEC = 72 (6/08/16)
    FAR = ?
    REG = ?
    AUD = ?

    January 8, 2018 at 7:01 am #1690804
    Katie
    Participant

    @lentilcounter

    Thank you! I will definitely take that advice. I just finished Becker's final review with a 67% over 223 MCQs and a 79% over 24 SIMS. So I feel like I have a good high-level understanding, I just need to nail down the details. I also printed out the Becker SIMs correlated to possible SIM topics that you provided on another thread. I will focus on my weak areas first while going over that later this week.

    I tend to study best under pressure. So hopefully these mock exams are the kick in the butt I needed.

    January 8, 2018 at 7:38 am #1690807
    Lentilcounter
    Participant

    @Katie

    Thanks. BTW, you got a really nice score on FAR! Did you utilize the AICPA blueprints or the blueprint FAR thread on here during your studies for that section?

    BEC = 72 (6/08/16)
    FAR = ?
    REG = ?
    AUD = ?

    January 8, 2018 at 7:40 am #1690810
    Katie
    Participant

    Yes, I did. I believe it's a big part of the reason I did so well. I felt prepared for all of my SIMS but one which I'm pretty sure was a pretest. Here's to hoping it's as helpful as the last time!

    January 8, 2018 at 7:54 am #1690814
    Lentilcounter
    Participant

    Thanks Katie. I'm glad. I keep telling people on this forum to use them, especially those struggling with FAR and REG.

    BEC = 72 (6/08/16)
    FAR = ?
    REG = ?
    AUD = ?

    January 8, 2018 at 11:52 am #1690882
    Recked
    Participant

    @Gugu
    Estimated tax payments are a result of how much you OWE, not where the income comes from.
    For example, someone on W2 salary could mess with their exemptions to the point that virtually nothing is withheld for Federal Income Tax.
    At the end of the year they could potentially owe a fortune.
    So just remember its not a matter of the source of the income, but really a matter of whether you have enough withholding on said sources.
    I think you are penalized if you owe the feds more than $1000 on your tax return, unless you meet the exemptions of 100% of prior year tax, 90% of current year tax, or 110% of prior year if over a certain amount (150k prior year).

    Real life – not on the exam. If you have an S corp officer you can run a large payroll at the end of the year and withhold/all of the paycheck to Fed income tax to prevent the penalties. IRS assumes withholding happens evenly over the course of the year, so you can loop-hole the underpayment of estimated tax penalties. Really comes in handy for S corp officers who are already clearing the FICA thresholds, as no additional SS or medicare is due on the large paycheck, as long as they are not above the additional medicare limit(extra .9% medicare income over 250K MFL, 200k Single). But even then, the additional .9% vs the underpayment penalty (4% in 2016) imposed on an annualized basis going back to first payment due in 4/15, it could really add up. NOT ON THE EXAM, but good to know.

    January 8, 2018 at 12:02 pm #1690886
    Recked
    Participant

    @scattershot
    My method is a little different than yours.
    I did the normal method for FAR as I had unlimited time. Watch the videos, read the book, did the questions, etc. I found by the end that I forgot so much of the first material. It was very frustrating to go back to the beginning and review it all over again.
    AUD I was rushed by the end of the window, so I watched the lectures in a row, then did 1000 MCQs, all in 3 weeks time. It was so short that I did not forget anything. I passed that exam so I am changing up my approach to the last 2 sections.

    Keep in mind I have 15 years in tax, with EA tests in 2013/2014, so this is all just a refresher to me.
    I have been doing “SIMs on crack” ie: actual tax returns for 15 years.
    My most complicated personal return runs a couple grand, and my most complicated 1120/1120S runs close to 5 figures.
    I anticipate BEC might give me some trouble with only 4 weeks of prep, and clients starting to bother me with tax season stuff, but I don't want to wait for end of Q2 2018 for score release so I'm burning the candle at both ends to knock this out.
    If I were to do BEC and REG again I would do BEC first, and take REG in Feb when my availability to study is lower.

    Keep on grinding, good luck all.

    January 8, 2018 at 12:18 pm #1690889
    chitown87
    Participant

    Quick question, does anyone know if you are the sole shareholder of either a C or S corporation, and property is distributed to you by the corporation, does this affect your basis in the corp?

    I know that you recognize income at the FMV of the property, and the corporation recognizes income as if the property was sold at FMV, and the shareholder's basis in the property received is the FMV, but I am unclear on how/if this adjusts the shareholder's basis in the corporation.

    January 8, 2018 at 12:31 pm #1690900
    Recked
    Participant

    I believe it depends on the nature of the distribution.
    Is it a distribution for services performed or a dividend?

    January 8, 2018 at 12:55 pm #1690909
    chitown87
    Participant

    As a dividend

    January 8, 2018 at 1:10 pm #1690922
    Recked
    Participant

    A property dividend would not directly reduce shareholder basis in a C corp stock.
    Think about if you bought 100 shares of Apple for $1000. If you receive a dividend from Apple it doesn't change that you paid $1000 for the stock, your basis remains the same.
    Unless its a liquidating distribution which would represent a return of capital (not sure C corps have Liquidating distributions).

    Dividend distributions don't really exist in an S corp per say (unless there is an AAE account). Earnings increase basis, and distributions (including property) reduce basis.

    I think I have this right.

    January 8, 2018 at 2:24 pm #1690958
    dj
    Participant

    For ninja #1042 when the partnership distributes land to the partner the partner values the land at then adjusted basis

    For ninja #1041 when the Corporation distributes land to the partner the partner values the land at then fair market value (FMV) instead of the adjusted basis

    For ninja #1041 is land valued at FMV because it’s a corporation (question does not specify what type of corporation) or is land valued at FMV because it’s a non-liquidating property distribution?

    Ninja #1042

    DB Partnership distributed land to partner Don when the fair market value (FMV) of the land was $50,000 with an adjusted basis to the partnership of $45,000. Don's basis in his partnership interest was $75,000 prior to receiving the land. After the distribution of the land, what is Don's basis in the land and his partnership interest, respectively?
    A. $45,000; $30,000
    B. $50,000; $25,000
    C. $50,000; $75,000
    D. $50,000; $30,000

    A is correct

    Ninja #1041

    ABC Corporation distributes land with a fair market value (FMV) of $100,000 (adjusted basis of $75,000) to Anna when the corporation's E&P is $350,000. Anna is the sole shareholder. What basis does Anna take in the land and what amount of gain does ABC Corporation recognize, respectively, as a result of this non-liquidating property distribution?
    A. $75,000; $0
    B. $100,000; $0
    C. $25,000; $25,000
    D. $100,000; $25,000

    D is correct

    January 8, 2018 at 2:36 pm #1690963
    Recked
    Participant

    If the question does not specify S corp, I believe you are to always assume C corp.
    E&P is also typically only referenced in C corp questions as well I believe, unless its an S that was previously a C but it will specifically say that).

    It's valued at FMV because its a non-liquidating distribution from a corporation, which counts as a sale(dividend at FMV) from corp to shareholder.
    The non-liquidating distribution is mentioned in the question so you know that none of the distribution is to be considered a return of capital.
    Distributions from corporation are treated as dividends to the extent of E&P.

    Appreciated property results in gain on sale.
    Losses not deductible except in liquidation of company.
    No gain or loss when sub liquidates into parent.

    Does NINJA provide explanations for why an answer is correct or incorrect?
    Roger will provide explanation why an answer is wrong if you picked the wrong one, and also why the correct answer is correct, even if you picked the wrong one. Often times the explanations match word for word for both correct and incorrect, ie: a thorough explanation.
    Gleim will tell you why the answer is right or wrong, and you can also select each of the other 3 answers to see why that one would have been incorrect. Roger does not let you select a wrong answer to see why it would have been wrong. It's a small detail, but can really help to drive a point home as far as distractor information in questions.

    January 8, 2018 at 2:42 pm #1690967
    Sri
    Participant

    Hi Friends,

    I see many people here are scoring 80-90 in FAR and AUD. Thats such a good score. Congrats guys. I got only 63 in AUD. I am not sure where I am going wrong. I just started studying REG and am planning to write it in the 1st week of March. Can you please suggest me a startegy to study REG. I got 53 during my 1st attempt in REG. 🙁 I was so good in my studies. Now I have full time responsibilites hence unable to take out much time for studies. feeling demoralized. I want to pass all sections of CPA this 2018.

    January 8, 2018 at 2:44 pm #1690969
    Recked
    Participant

    How many MCQs are you doing?
    Repetition is key. practice practice practice.
    Take notes on why you got it wrong, or if you had to pick between 2 and got it right, why it was the correct guess.

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