REG Study Group – Q1 2018 - Page 26

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  • 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 - 376 through 390 (of 428 total)
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  • February 9, 2018 at 9:33 am #1710156
    Anonymous
    Inactive

    Thank you Bourne!

    I am also scared from Regulation. I dont know. My exam is coming up on March 2nd. I think Reg is harder than FAR. Good luck to all!

    February 9, 2018 at 2:46 pm #1710450
    CPA_2018
    Participant

    Hey guys – so I have been struggling with reg for the past year (only exam left) and I just took a mock exam and scored 76. I have done all of the becker MCQ, all of the simulations based on the AICPA blueprint, and I have supplemented NINJA MCQ about 3 weeks ago. I haven't been able to get through all of the NINJA MCQ but I have put in a good dent, trending score is 82%.

    Any recommendations to improve my score? My exam is on Monday.

    February 9, 2018 at 11:22 pm #1710682
    Anonymous
    Inactive

    Working full time and preparing REG isnt fun, especially during tax season

    February 11, 2018 at 2:53 pm #1711390
    Kev
    Participant

    Can someone explain to me the AICPA sample exam question testlet 2? I do not understand how they got $2,400 for the depreciation expense in year 2? The vehicle is MACRS 5 years and was $20,000 so wouldn't year 2 be $6,400 (20,000 x .32)? Any explanation would be greatly appreciated because this is driving me crazy.

    February 11, 2018 at 3:08 pm #1711417
    Bourne
    Participant

    They sold it in year two. You get half year of depreciation in year of purchase and half year depreciation in year of disposal. So you need to take half of the year two depreciation %. Also, if you look at the travel tab, the truck was used 75% for business (24,000 miles / 32,000 miles = .75). So, you tale 20,000 x (.32 x .50) x .75 = 2,400

    February 11, 2018 at 3:16 pm #1711420
    Kev
    Participant

    WOW….thank you @Bourne. I did not even take into account the usage of the truck at 75%. Great way of explaining which now allows me to pay attention to EVERYTHING.

    February 12, 2018 at 11:27 pm #1712507
    fortheboyz
    Participant

    Hi All –

    New to the forum. Have a couple questions, if you could help out that would be great.

    QUestion regarding gifting property. I noticed two differing statements in the ninja notes. If the property is later sold at a loss, does it take FMV at time of gift? Or is the lesser of FMV at time of gift or donors basis?

    Additionally, if sale price at time of disposal is in between donor basis and fmv at time of gift, I know there is no gain loss. But does it matter if the sale price at disposal is greater than fmv at gift date and less than donor basis? So its still in between but the donor basis and fmv at gift are switched.

    Does anyone know if exam is going to test on the updated annual gift exclusion amount of 15,000 per donee?

    Thanks guys.

    February 13, 2018 at 12:06 pm #1712740
    dj
    Participant

    @fortheboyz

    1. $14K exclusion for exam purposes (someone correct me if I'm wrong)

    2. My understanding is if gift depreciates for giver then the basis for the recipient is dependent on what price the recipient sells the gift for.

    Ex: You give me stock. You bought stock for $10 and stock depreciates to $5 when you give me stock.

    a. If I sell stock for $3 I would use $5 (FMV) as the basis to determine gain/loss
    b. If I sell stock for $11 I would $10 (your initial basis) as my basis to determine gain/loss
    c. If I sell stock for $7 there is no gain or loss because it's between $10 and $5

    However if you bought stock for $10 and give me stock when it's $12 (stock appreciated). I would always use $12 as the basis no matter what

    3. Also if gift is given and it's related parties there is no loss allowed for giver. However recipient can take disallowed loss and apply it to gain if he sells gift to unrelated party.

    Related party gains are taxable

    February 14, 2018 at 6:43 am #1713241
    Kev
    Participant

    @DJ @fortheboyz i think everything you said was right except for the example when the FMV was higher upon giving the stock to someone else. In that case your basis is the same basis of the original owner of the stock (adjusted basis). The only time the FMV is used in that situation is upon death of the original owner.

    Someone please correct me if I am wrong.

    February 14, 2018 at 8:24 am #1713280
    dj
    Participant

    @Kev

    I think you're right.

    I meant to say when stock appreciates and is given as a gift the basis would be $10 (initial basis) to determine gain or loss not $12 (FMV)

    February 14, 2018 at 7:21 pm #1713575
    Sturg
    Participant

    Can someone please explain this one…

    Nolan designed Timber Partnership's new building. He received an interest in the partnership for the services. Nolan's normal billing for these services would be $80,000 and the fair market value of the partnership interest he received is $120,000. What amount of income should Nolan report?

    The answer is the whole 120,00 but I thought for contributing services it was the excess of services over the FV of the interest received [IRC 83(a)].

    What am I missing here??

    February 14, 2018 at 8:52 pm #1713643
    dj
    Participant

    @sturg

    I believe IRC 83a is for performing services and receiving property in return for those services. That would be

    FMV of services given – the basis in property given = taxable gain for recipient

    In question he is giving services for ownership interest in partnership. He is not receiving any property in addition to the partnership interest so he would report the entire FMV of services given

    https://www.law.cornell.edu/uscode/text/26/83

    February 16, 2018 at 7:37 am #1714397
    Kev
    Participant

    Hi All,

    I am having a hard time remembering how to reconcile book and tax income. The add backs and subtracting items are killing me. Just took Becker Mock exam 1 and I got every question on that SIM incorrect. Idk if it is the way they word the question or I just am not grasping the concept. Does anyone have an easy way to remember this or any suggestions on the best way go about learning this more.

    February 16, 2018 at 9:50 am #1714475
    dj
    Participant

    @Kev

    This is what I have from ninja

    Sources IRC 103 and 265

    Net income per books (after taxes)
    Add: Federal income tax
    Net capital loss
    Taxable income not recorded on the books
    Book expenses not deducted on the return
    Deduct: Book income not subject to tax (tax exempt income-municipal bond income)
    Deductions on the return not recorded on the books
    ————————————————–
    = Taxable income (before net operating loss
    deduction and dividends-received deduction)
    ==================================================

    February 16, 2018 at 11:50 am #1714592
    pcunniff
    Participant

    @kev keep in mind that book and tax income defer. It might not be a bad idea to review that section in FAR to understand what gets included in book income and then look at REG to see why something like prepaid rent, or prepaids are INCLUDED in taxable income whereas prepaids would not be included in book income. Something to keep in mind

    REG-79
    AUD- 77
    FAR- 78
    BEC-79

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