[jeff]

NINJA Study Notes, Flashcards, and Audio: https://www.another71.com/products-page/

Wiley Software: https://www.another71.com/wiley-cpa-software/

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

[gans555]

@readytopass Think of worker's comp as “making you whole again.” Just like damages in a lawsuit to make you whole again. Both of these are not taxable and excluded from gross income. Unemployment compensation is just plain taxable, that's just statutory by law. It kinda just sucks that it is. But you could make the same point for social security. Now you have to pay tax on the tax, so to speak. (this is only for high income taxpayers, or AGI above 65000, which how the heck do you consider that high income?)

Anyways, the point is Workman's comp makes you whole again- non taxable

all of unemployment is fully taxable as ordinary income

[Shay]

I am having trouble understanding the “Net Book Income” concept. Few problems in Becker gives net book income and ask to find taxable? (mostly given accounts are fed income tax and tax-exempt interest) I want to when to add or subtract from net book income.

[gans555]

@Shay, Net book income is needed when you are finding CEP (current earnings and profits). You need to find this because this account is the first account reduced when paying dividends by the corporation. CEP is the same as book income. Usually they give you taxable income and you have to find the CEP. So a few things you who need to do is add back: tax-exempt income, dividends received deduction, excess MACRS over book depreciation. Deduct: federal income taxes, net capital loss, excess charitable contributions.

To be honest, this is just reconciling taxable income and book income (same thing you do on schedule M-1). Just take you time and think it through. If you rush this, you will make a mistake.

[Shay]

@gans555. I understand your first few lines of 1st paragraph. Last two lines, you say to “add-back” and “subract. I am having issues with this list.

I thought you subtract tax-exempt interest and add-back fed. income tax, because fed incomes are NOT deductible for tax purposes? .

So, anything that is NOT deductible is added-back??

thanks

[gans555]

@shay, some things that are not deductible will be added back, and some things will be subtracted. This is because you are starting at TAXABLE INCOME and going to BOOK INCOME. So let's look at a couple examples:

Federal income tax- If I am starting at taxable income, federal income taxes are not deductible. However they are deductible in book income. To reconcile, I would have to SUBTRACT federal taxes paid from taxable income to arrive at book income.

Excess Charity contributions- I only get a 10% deduction (limitation) for my charitable contributions. However, on the books I would really show all the contributions as an expense. So I would need to SUBTRACT the excess charitable contributions from taxable income in order to arrive at book income.

Tax exempt interest- this is not included taxable income. However, it is included on the books as revenue. So, in order to reconcile, I would need to ADD this revenue back to taxable income to arrive at book income

[readytobedone]

Hey I have a question about how long it takes to prepare for REG…

I've passed AUD, FAR, and BEC already, all with varying times. For AUD I believe I took 5 weeks, FAR I took 7 weeks, and BEC 2.5 weeks (and best score too!!). I just started REG this Tuesday, and really would love to take it by July 20 (end of first window!!). My schedule is open…as in…really open. I just finished up grad school and don't start work until August so I can really study as much as I want. I've only used Becker and its worked so far, but I will probably get the Wiley bank just to give me the extra bump. So question is…is taking REG with 4.5 weeks of studying (with a few tax grad courses) too ambitious? I don't want to rush it and then fail…but I don't want the agony of waiting 4 weeks for my last score either!!

[Shay]

most of the question in Becker ask about “starting from Book net income” look at CPA-02021. These types of questions, I am having trouble in R3. So far R1 and R2 was good.

[Anonymous]

Help with casualty loss:

Is casualty loss still remain the standard amount of $100 or it has been increased to $500. I usually use $100 but then when I was solving some sims (not from becker), they used $500 on several questions. Can anybody help or confirm this. This is made more difficult because I use becker 2011 edtion and there is nothing to suggest (in the update to the 2011) that the casualty amount has been increased. I will appreciate contributions from anybody please!!!!

[gans555]

Casualty loss is 100 in 2011

[Shay]

Casualty Loss is $100 in 2012ed for Becker. Don't forget 10% AGI limitation

[LittleMoe]

@readytobedone I think you will be fine. I am taking one undergrad tax course (to finish up hours I need for my license) while studying for REG. I will have just under 6 weeks (also shooting for the first score release!!) while working full time and taking a class. I am taking Tax I so I didn't spend any time reading the Individual Tax section. I am getting it as I go through the class. I just spend more time on my homework and reading the chapters for class than I normally would because I know I will need it for the exam. So far, it seems to be an advantage to be taking the class while studying for REG. I will take REG on 5/19 and then my final for the class the next week lol

Since you aren't working and your classes should go right along with what you are studying, I think you can knock it out. Just make a plan and stick to it. You've been through this before and know what you need to do. The absolute worst case scenario for you is to have to push it back a little if you don't feel ready. I am trying to get REG done in time to get BEC finished this window too. I know I may be pushing myself a little but I'm giving it a shot!!

AUD 4/12/12 79
FAR 5/29/12 76
REG 8/2/12 82
BEC 8/30/12 72 Retake 10/18/12 76!!! DONE!!!!
ExamMatrix, Wiley Books, NINJA notes and audio
LICENSED ALABAMA CPA 11/30/12

[Anonymous]

need clarification with AMT for individuals:

Do you add back all of the 2% misc. itemized deduction to taxable income when computing AMT for individuals?

using cpaexcel, and in the text book it say it does, but in one of the Sim the answer key only add back a portion of the 2% misc. itemized deduction.

[Anonymous]

Ahhhh. It's hard to say goodbye!

Bye-Bye river trip, New Orleans trip, and possibly Las Vegas trip. Hello MORE studying! 🙁

Any suggestions on studying material for REG? I was strictly using the Wiley Book, Notes, and Test Bank….(AND a little help from my out-of-date Becker Book). I'm thinking about purchasing CPAexcel. Opinions on CPAexcel?

[Shay]

Tim Gearty said regarding “Ethics and Profession….” R4-3 section, that there might be 3 max questions, if any and not heavily test area on the exam. should I be worried, because there 50 pages of these ethics? I feel like skipping that area.

[Anonymous]

Need some help and any input would be much appreciated. I am using Becker and Wiley Test Bank. My problem is that Becker has nothing on a section that Wiley calls “Property” and I am not sure what I should do about it. Is this a major topic, or just an extra topic that not much time should be spent on? Thanks

[Author]

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