[cpa1234]

Has anyone gotten parts of a sim wrong in becker reg section because they couldn’t understand the question? I have actually gotten a handful of parts wrong because I really couldn’t understand what I was being asked. If this is the case for others, are you as confused by the ones on the exam too or is this just a becker thing?

For example:

I just did a sim in becker about calculating how much of the charitable donations throughout the year could be included on the return. The last question said there was a $3m donation, how much max is allowable? It sounded like they were asking how much of that specific donation could be included, which would have been like $1m or so based on how many other donations they made. BUT the answer in the solution was actually how much their max charitable deduction in the year was, the 50% of AGI, or $2.5m.

so why was the $3m donation combined with a question having nothing to do with it? Was that specifically there to confuse me? because there’s plenty else on the exam doing just that I don’t need confusing instructions too 🙂

[Anonymous]

What's the SIM number in Becker?

[cpa1234]

R2, Sim 1, Sim #3

[Anonymous]

For example:
I just did a sim in becker about calculating how much of the charitable donations throughout the year could be included on the return. The last question said there was a $3m donation, how much max is allowable? It sounded like they were asking how much of that specific donation could be included, which would have been like $1m or so based on how many other donations they made. BUT the answer in the solution was actually how much their max charitable deduction in the year was, the 50% of AGI, or $2.5m. (YOU GOT IT. YOU ANSWERED YOUR OWN QUESTION.)
so why was the $3m donation combined with a question having nothing to do with it? (IT WAS JUST AN EXAMPLE; YOU CAN DONATE AS MUCH AS YOU CAN AS AN INDIVIDUAL OR CORPORATION, BUT ONLY A CERTAIN AMOUNT OF DONATION WILL BE DEDUCTIBLE {AS PART OF DEDUCTIONS ABOVE AGI) OR INCLUDIBLE IN ITEMIZED DEDUCTIONS ) Was that specifically there to confuse me? because there's plenty else on the exam doing just that I don't need confusing instructions too. (IF YOU SAY ‘’CONFUSE’’ YOU. IT’S THERE TO CONFUSE/TRICK CANDIDATES. IN ANSWERING CHARITABLE CONTRIBUTIONS, CHECK FIRST IF IT’S FOR INDIVIDUALS OR CORPORATIONS OR NONOPERATING PRIVATE FOUNDATIONS, THEN PROCEED TO THE NEXT POSSIBLE SCENARIO. IS IT CASH OR PROPERTY?)
Here’s my note compilation about charitable contributions. You might get a comprehensive SIM in your actual test. Hope you find this helpful.

Charitable Contributions
• Charity – items given to organizations are tax deductible
• Gifts – items given to individuals or needy family are nondeductible
• Political Contributions – items given to candidates are nondeductible
• Maximum Allowable Deduction (50% of AGI)
o Cash = 50% of AGI
o FMV Property = 30% of AGI for gifts of long-term capital gains property to public charities
o Contributions of ST property are generally deductible at the lower of cost or FMV.
o Gifts for Nonoperating Private Foundation = 20% of AGI
• Combination Rules
The total deduction for all gifts including LT capital gain property cash and other property may not exceed 50% of AGI

PASS KEY
The CPA Examination has typically tested the following rules with regard to charitable contribution limitation:
Overall Limit = 50% AGI
1) Cash – may be all 50%
2) General property—lesser of basis or FMV
3) Long-Term appreciated property—is limited to the lesser of:
a) 30% of AGI
b) The remaining amount to reach 50% after cash contributions

• Consideration for Contribution – TP (Taxpayer) may only deduct the excess contribution over the consideration received.
Charitable organizations that obtain contributions of more than $75 in exchange for services or property must provide the donor with a written statement that estimates the value of the deductible portion of the payment.
• Contribution for Services
Out-of-pocket expenses include cost of driving to and from the volunteer work; TP may take $0.14 per mile or the actual cost of gas and oil; plus parking fees, tolls
• Student Living in TP’s Home – Exchange student who may not be beyond the 12th Grade; total deduction is up to $50 per month for each full month (15 days or more days), student is in the home and attending the school.
• $500 contributions or more for noncash property, TP must file Form 8283.
• $5,000 or more claimed for stamp collection, etc. requires a written appraisal for each item/group donated, except that no appraisal is needed for publicly traded securities.
• Carryover of Excess Charitable Contributions – 5 Years

[Joetse]

What they're asking, as for ALL tax questions, the WHOLE POINT of tax, is always how much xyz amount “IS DEDUCTIBLE”. That's always what they mean. The point of hiring a tax accountant is to maximize your deductions and minimize your tax liability (legally. I didn't say ethically. LOL). So, max for charitable for individuals is 50% for those type of assets. (Appreciated FMV non-money property). They're seeing if you know what are 50% assets and what are the 30% assets for charitable purposes, and whether you know the differece in rules for individual, vs corporate, because for corporate, it's limited to 10% of pre-charitible, pre-DRD, post-carryover NOI.

[Anonymous]

Wording in the actual exam is MUCH clearer. I always felt in the Becker sims that they weren't very clear on what format, etc. they wanted answers in. I.e. are deductions entered as positive or negative. The real exam has very clear, easy to follow instructions.

[Author]

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