REG Study Group – Q1 2018 - Page 12

I am reading a topic and doing mcqs simultaneously. Around 40-50 MCQS. I guess I will practice more. Thanks @ReckedRacing.

No penalty if withholding and estimated tax payments exceed LOWER of 100% prior year liability or 90% current year liability.
If he had 0 tax liability in 2016 then I believe he will be exempt from underpayment of estimates.
If he earned 68k from Uber he's going to really go through his expenses with a fine tooth comb or he is going to get destroyed with SE tax plus income tax.
Uber should provide him with a mileage statement, but that might only have “ACTIVE” miles, he would have additional mileage to get to and from pickup/drop off points.
Hopefully he has (or will have) a mileage log to account for total business miles driven during the year. That really adds up to a nice expense for Uber drivers.
Other things he should claim would be car washes, or any additional perks he provides to passengers such as mints, beverages, in car video games.
These are a few of the areas covered in my NATP class this year for ride sharing drivers.

I would advise your friend to file and pay as soon as possible.
He'll need a Sch C to claim the business expenses.
If he gets in a bind with owing a ton of money he should consult a professional who is familiar with ride sharing income, they might be able to advise him of additional expenses to claim.

@ ReckedRacing

Waw! Thank you so much. I think I will be addicted to this forum. REG is making sense now!

Thanks again.

Here I am again. Got confused with this little detail. Related parties loss are never recognized. Definition of R/D Parties is simply FAMILY OR 50% or more owned Business. For Corporate Dividend Received Deduction and Consolidation purposes , we consider the 80% rule as related to the corporation. The 50% is just basic definition of related parties ( or for transactions only. Am I complicating things in trying to relate two different items ? Please help.

@gugu I agree with Katie.

Related party provisions:
– section 267 prevents taxpayers from shifting ownership % of stock or property to a related person or entity in an effort to take advantage of beneficial provisions of the IRS while still controlling their original interest
– several “constructive ownership” rules

Definition of related parties:
– brothers/sisters, husband/wife, ancestors and lineal descendants (grandfather, father, son)
– entities that are more than 50% owned directly/indirectly by individuals, corporations, trusts/partnerships
– controlled groups (any two corporations, partnerships, etc.) both more than 50% owned by the same party
– various relationships between trusts, grantors, fiduciaries, etc.
– tax-exempt organizations and person controlling directly/indirectly such organizations

I finally took the exam, and honestly I have no idea how I did. It wouldn't surprise me if I got a 70, and it wouldn't surprise me if I got a 90.

I was able to finish the exam with about 20 minutes left and was able to use the authoritative literature to look up a few items for the last testlet.

All of the sims that I can remember, besides the research sim, were of the enhanced DRS type. It took me about 30 minutes to find my research answer, which was the most stressful part of the test.

I know of a few questions or parts of sims that I missed, but I also know that a number of my guesses ended up being correct. All in all, I *think* that I passed but wouldn't bet money on it. I was surprised by some of the minutiae that was being asked on the sims; it was definitely not all basic or general level of understanding type stuff.

I want to reinforce this concept. Please help!

IN a tax-free incorporation , the percentage for “Control” is 80%. (I.e control exists if the shareholder owns at least 80% of the total voting power AND at lease 80% of the total shares of all other assets of stock.

Is there a possibility that a shareholder controls ONLY either of voting power or total shares? If, yes does the control test met?