[noodles]

1. Child’s standard deduction (2013)

Here’s the 2012 amount: the greater of: 950 or child’s earned income + 300.

Is there a change in 2013?

2. State income tax of a sole proprietor’s business should be reported on owner’s 1040 itemized deduction, not schedule C?

3. Withholding tax is deemed to be paid evenly throughout the tax year (can’t find this in the book)? From my tax class, I remember withholding tax is deemed to be paid on return due date…

4. “Capital gain distribution” is reported on line 8 of k-1? I thought all distributions go on k-1’s line 17-distributions?

5. Becker keeps mentioning the difference between income vs. corpus. Where do we need to use this?

My exam is coming up soon, any help is appreciated. Thanks!

[barelystayingsane]

These are some great questions. I don't know if I can answer all of them, but I'll answer the ones I can.

1. I'm guessing by this question you haven't seen this link: . Yes, there is an update. If anything, it's become easier to remember, since it's a nice round $1,000.

2. I was confused about this, as well, back before I took REG. See this thread: https://www.another71.com/cpa-exam-forum/topic/deducting-statelocal-taxes-for-companiessole-proprietorships.

3. I think your tax is deemed to be paid evenly on the four estimated payment dates. I think it's mid-April, mid-June, mid-September, and mid-January. Can someone verify this?

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[barelystayingsane]

4. Which form's K-1 are you looking at?

5. I'm guessing you're talking about the table on R4-24? Personally, I don't think this is a big deal to memorize, since all of my review questions indicated what was corpus and what was principal. However, you would use it when calculating distributable net income, because you must subtract capital gains attributable to corpus from your adjusted total income. For accounting/fiduciary income, you would not include any income or expense allocable to corpus.

[noodles]

1. I'm guessing by this question you haven't seen this link:. Yes, there is an update. If anything, it's become easier to remember, since it's a nice round $1,000.

-Thanks! The book didn't mention the earned income + 300, so I'm assuming for 2013 the standard deduction is:

The greater of: 1000, or child's earned income + 300.

4. Which form's K-1 are you looking at?

-i'm just confused about what capital gain distribution is. It seems capital gain distribution = capital gain… I think I got it.

5. I'm guessing you're talking about the table on R4-24? Personally, I don't think this is a big deal to memorize, since all of my review questions indicated what was corpus and what was principal. However, you would use it when calculating distributable net income, because you must subtract capital gains attributable to corpus from your adjusted total income. For accounting/fiduciary income, you would not include any income or expense allocable to corpus.

– you mean on Form 1041, we don't include income/expense related to corpus?

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[barelystayingsane]

Shoot, I misread #1 as a question on the kiddie tax. My apologies!!! It may not be $1,000. Let me look into it.

[barelystayingsane]

Here you go: $1,000, or; the dependent's earned income plus $350, but not to exceed the standard deduction for the dependent's filing status.

[noodles]

5. I'm guessing you're talking about the table on R4-24? Personally, I don't think this is a big deal to memorize, since all of my review questions indicated what was corpus and what was principal. However, you would use it when calculating distributable net income, because you must subtract capital gains attributable to corpus from your adjusted total income. For accounting/fiduciary income, you would not include any income or expense allocable to corpus.

– you mean on Form 1041, we don't include income/expense related to corpus?

[barelystayingsane]

No, accounting/fiduciary income would be on your financial statement, not your tax return (at least that's how I always understood it). For your tax return, you would subtract all expenses, regardless of their designation, from taxable income. I only included that last part on #5, because Becker has thrown in a few questions about accounting/fiduciary income, so it may appear on the exam.

[noodles]

Ok thanks a lot. Glad to learn from someone who got a 98 on REG!

[barelystayingsane]

No problem. I actually may be off on the fiduciary income question. Fiduciary income may not be on your financial statement and may appear on your tax return. It looks like there are three income distinctions when it comes to estates/trusts: fiduciary accounting income, distributable net income, and taxable income. But I haven't really been able to find a good definition of what separates the three, except for this (which I find to be utterly unhelpful): https://www.thomashuse.com/Trust%20Income.pdf.

This is probably minutiae that I wouldn't worry about. I only saw two questions on the Becker software about fiduciary accounting income, so I would focus on DNI.

[Author]

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