[Anonymous]

So I am now using both Becker and CPA Excel and have come across an interesting issue. Per Becker, the organizational expense limit is $5,000 with any qualifying expense excess amortized over 18 months, up to 50,000, with a reduction dollar for dollar on the 5,000 of any excess over the 50k limit. CPA Excel says it’s $10,000 and 60k limit, effective 2010. ANyone else noticed this? I have the 2011 Becker books and didn’t see any mention in there.

[WhyMe23]

It's $5,000 and $50k per Becker 2011

B - 85 (5/31/11)
A - 93 (7/1/11)
R - 87 (7/29/11)
F - 77 (8/31/11)

[yankeeaccountant]

I agree with Whyme23…..Becker is 5,000 and $50,000 limit

[MAcc Grad_NDSU]

IRS Publication 535 (2010):

“Special rule for 2010 start-up costs. For tax years beginning in 2010, you can elect to deduct up to $10,000 of business start-up costs paid or incurred after 2009. The $10,000 deduction is reduced (but not below zero) by the amount such start-up costs exceed $60,000. Any remaining costs must be amortized.”

Exess amount is amortizied over 180 months (15 years)…not 18 months. I'm expecting a question on it due to the change.

BEC - 77 (exp. 2/23/12)
REG - 75
AUD - 10/12/11
FAR - 11/30/11

[Anonymous]

Yaeger used $5,000.

[Anonymous]

Becker uses $5k and CPA Excel uses $10k. I have corresponded with the AICPA multiple times over the past few weeks regarding the absurdity of the REG exam (I was very respectful and polite, which wasn't easy) and will shoot them an email and see what they say. I am assuming on the exam, if a question arises such as this, it will say “assume 2010 tax rules” or something to that effect.

[Anonymous]

The Becker updates have the change. You can go to their website for the latest updates.

There are a lot.

[MAcc Grad_NDSU]

Watch the dates they'll use in the problem. If they use dates after 1/1/10 use the 6K/60K. If the problem has 12/31/09 or before use 5K/50K. Becker uses $5,000 because when they went to print the new tax law changes weren't known yet. Same thing with Wiley and Yaeger. Not sure if you are aware, but Sec. 179 changed as well. Now a $2,000,000 cap on new machinery instead of $800,000. I remember these changes by relating them to the recession and how the gov't is trying to jump start economic activity.

Tax law tends to change every year, not sure what is absurb about that. You'll have to keep up on the changes as a CPA, so why not for the exam?

BEC - 77 (exp. 2/23/12)
REG - 75
AUD - 10/12/11
FAR - 11/30/11

[WhyMe23]

I thought that most people who took REG recently said that the old 2010 numbers were still being tested?? That was the response I got from a lot of people on here.

B - 85 (5/31/11)
A - 93 (7/1/11)
R - 87 (7/29/11)
F - 77 (8/31/11)

[Anonymous]

To MAcc, Becker says $200k, not $2,000,000.

[WhyMe23]

The new rule of $10k/$60k is ONLY for start-up costs, the old 5/50 is still in effect for organizational costs

B - 85 (5/31/11)
A - 93 (7/1/11)
R - 87 (7/29/11)
F - 77 (8/31/11)

[MAcc Grad_NDSU]

@WhyMe23 — Thanks for pointing out that I didn't actually “read” what I posted from Pub 535…Sorry for the confusion, I was looking at organizational costs and start-up expenses as the same thing. That whole reading comprehesion thing can somtimes be my downfall…

@EPRESOGNA — This thread wasn't about Sec 179, so sorry for the derailment. I also poorly worded that remark about it, I was referring to the threshold being raised. I was trying to point out there are changes.

Dang, I ruined this thread…back to lurking for me.

BEC - 77 (exp. 2/23/12)
REG - 75
AUD - 10/12/11
FAR - 11/30/11

[WhyMe23]

I know how that goes, reading comp usually isn't my strong point either. Thanks for pointing out the change for start-up I would have just assumed they were the same if I didn't see that update.

I think the new rules for 179 are $500,000 deduction for machinery/equip (250,000 if real, personal property or software) reduced by any amount over 2 million. There is also a “bonus depreciation” of 50% for new equipment placed in service before Sept 9, 2010 and 100% between September 9, 2010 and January 1, 2012. Also there is an additional $8,000 1st year depreciation for vehicles.

It is hard to memorize all that on top of everything else. Still not sure if that will be used or the old 250,000 reduced for any amount over 800,000 though.

B - 85 (5/31/11)
A - 93 (7/1/11)
R - 87 (7/29/11)
F - 77 (8/31/11)

[Anonymous]

Has anyone found errors on Becker 2011? I am very concerned about it 'cause it's my main review material.

[Whenindoubt]

I haven't found any errors, but then I wasn't looking for any either. Just be sure to update your book for 2011 with the knowledge base updates.

BEC: 75 11/8/10
AUD: 89 2/22/11
FAR: 78 5/17/11
REG: 72, 83 10/17/11
DONE!!!!

[Anonymous]

WhyMe, great post!

I actually had to go into my tax software at work to determine what was right. Organization expenses are expenses that occur BEFORE the Company is formed, for which the $5k/$50k rules apply. The Start-up expenses are expenses that occur AFTER the Company is formed, but BEFORE it is fully operational, that have the $10k/$60k rule.

The new 179 as you mentioned is correct; $500k/$2m limit rules

This is something I could see the examiners having a few multiple choice questions on, or potentially even a tab in the Sim as REG is know to include Sims based on small topics in the book. Hope this helps everyone and sorry for any confusion. Thanks again WhyMe for clarifying!

[Author]

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