[Anonymous]

Just wondering if I could get some input on this question. While studying for this exam, Becker taught me to use the amount of $500 to reduce the amount of casualty/theft loss before applying the 10% of AGI.

Upon looking at the Becker website, it now says that for 2010, that number has returned to $100 (apparently how it was in 2008 and before).

My question being, how should I approach this issue? I’ve heard the exam is anywhere from 6 months to a year behind the current date…which puts me in an interesting position. Use 100 or 500?

I kinda get the feeling that there are a few of these situations and I am wondering if they will have an effect on me during the exam.

Any advice or comments on this issue are appreciated!

[Anonymous]

Unfortunately I think you will need to know each year just to be safe. You will need to look at the fact pattern and see what year the casualtly/theft loss occurred and apply the appropriate amount for that year. But since you are well aware of the change you probably will have no problem remembering what amount applies to what year. Good Luck on your REG exam Friday.

[Anonymous]

I'm attending a live Becker course and was told in class to follow the $500…but we've been noting that the Becker book is not appropriately reflecting tax law changes either (and we've only gotten through chapters 1 & 2 so far).

[Ichabod]

As I understand it they are testing the 2009 tax year info, since 2010 isn't written in stone yet. Use the $500, imo.

[jeff]

If the tax year given on the exam is 2010, I would use the $500 amount. It's on IRS.gov last time i checked.

AUD - 79
BEC - 80
FAR - 76
REG - 92

Jeff Elliott, CPA (KS)
NINJA CPA | NINJA CMA | NINJA CPE | Another71

[moon]

@ CPAinWV, I got confused too. My online Becker class starts in July and I have it in my notes to ask that question to the instructor. Even in one of the MC's, they use $100. And on the book, on one page they use $100 and on the other $500. That really confused me.

BEC-80
FAR-74,79
REG-August

[JPino23]

I am using Becker and I had the same issue. Upon doing the homework problems, I calculated each casualty/theft loss question with both the $100 and $500 amounts. I came to the conclusion that the casualty/theft questions mainly test on the approach to arriving at an answer, not specifically the dollar amounts used. The exam won't try to trick you with making you “choose” between $100 or $500 per event. So if you know the formula for finding what a deductable casualty/theft loss should be, just rework it using both amounts and see which answer is an available option. In other words, if you use 100 dollars in the formula and rework it using 500 dollars in the formula, only one of those answers will be an available choice, not both. As long as you are confident you did the formula right, that should be the correct answer.

REG 94, AUD 87, FAR (10/8), BEC (11/24)

"Do today what others won't, so tomorrow you can do what others can't."

[moon]

Thanks JPino23. I just checked Regulation Tax Law Update (Becker online). It says:

” The item discusses the tax law rule for the year 2009, in which a $500 floor per casualty event applies. For 2010, the amount reverts back to the floor amount of $100 per casualty event, which was the law in place for several years prior to the year 2009.”

I hope this helps, CPAinWV.

BEC-80
FAR-74,79
REG-August

[polygman]

I'd like to expand on this a little further if I may. It seems simple when were just referring to either a $100 or $500 threshold. But how are others treating the changes in tax law, such as those outlined in Becker's Tax Law Update for July 22, 2010?

It seems to me you have to set a cutoff point in the tax law when studing for REG, which would be the six months to the date prior to your exam.

I'd like to add that I am also taking my REG exam on July 2nd and figured I would ignore the becker updated as of 6/22/2010 and stick with studying the material that was in law up to December 31, 2009. Does this sound correct?

[moon]

@ Polygman, I think you are right with 6 months cut-off point.

BEC-80
FAR-74,79
REG-August

[Anonymous]

Jeff, I have to disagree on which number to use. I was studying this the other night and was wondering the same question as the rest of the posters on here… Which figure should I use? So I looked it up. The IRS site says the $500 reduction is returning to $100 after December 31, 2009. So it does say the figure is $100 in 2010. However, during the exam I would be sure to pay attention to the year in the question. After reading these posts I had to look the IRS site up again to be safe. I'm providing the link below.

https://www.irs.gov/taxtopics/tc515.html

[Author]

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