[jeff]

REG Study Group Links and Resources:

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4. How to Pass REG (with NINJA)
5. How to Pass REG (in 20 Days)
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[74phoenix]

LOL RTFQ! Never heard that before until I googled it. So true – I miss 1 or 2 when doing tests because I didn't read the question correctly, or what it was requesting. I wind up doing more work, too. Don't let the wrong answers keep getting you down @Tncincy – no matter what, they are to be learned from and can show you what your weak areas are. If you have questions you don't understand, let us know in this forum!

Graduated 05/2016.
NY CPA Candidate.
Public accounting.
FAR COMING UP 07/07/2016 !! GOD HELP ME.

[Tncincy]

@74phoenix Thanks for the advice. It's been along day. But I am starting my evening session. I didn't make my goal yesterday. only 50 mcq's. I'm in tonight. I will get it done. I'm writing notes for now then I'll start my mcq's. Keep studying hard gang. Where are you 23?

It begins with a 75
Been here too long as a cheerleader....ready to pass

[23]

Got 50 in today. Aiming to do 30 more tonight along with a couple sims. I'm usually dragging by Friday, but I need to get more done. Thanks for keeping me accountable!

WA candidate

[Tncincy]

Starting my afternoon session, shortly. I've listened to audio this morning, next I'm going after the mcq's . I might do a sim or two, depends if the mcq's don't make me feel more unprepared for this exam. I know, I know, get ready is the name of the game. NO EXCUSES

It begins with a 75
Been here too long as a cheerleader....ready to pass

[23]

Starting here too. Got a second wind last night and ended up doing over 100 MC for the day, pushing me over 2000 total in NINJA MCQ. A bit concerned that my trending score has only moved 1 point over the past 1000 questions…
Don't be afraid of those sims @tncincy. Just aim to do one. Then another.
What's your plan for the last few days @74phoenix? Power through that finish line!

WA candidate

[74phoenix]

@23 I think their algorithm tests you with harder and harder questions? So I wouldn't worry about the trending score not movig..or at least that's what I'm telling myself LOL. I'm a bit anxious today – haven't gotten much studying in. I feel a bit burnt out and Monday is my test! Still trying to kick butt though. Tomorrow I plan to hit SIMS hard in the morning, then review MCQ in the afternoon, review my notes at night, and pray to God all day. LOL! On Monday morning, I am going to watch a few Ninja Blitz videos and eat a nice breakfast.

Graduated 05/2016.
NY CPA Candidate.
Public accounting.
FAR COMING UP 07/07/2016 !! GOD HELP ME.

[Tncincy]

@74phoenix You think you're anxious. Every time I get ready to do mcq's I go back to my notes. I am thinking I need a current property transactions lecture. I am not getting it from the book. Nor the capital losses. I am absolutely panicking. I am going to keep going. But hey 74phoenix, this is your show. Keep going at it, you might just know enough to pass. Good luck to you.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[74phoenix]

If the CPA was easy, everyone would be one. We have to keep trying! I need help with a DRD question…

Question: C corp received 100K in dividend income.
Taxable income before DRD is 90K.
Loss from Operations is -10K.
Dividends received as mentioned is 100K.
How much is the DRD?

Answer: The dividends-received deduction (DRD) is generally calculated as 50 percent of dividends received, which would be $50,000 (50% × $100,000). However, the deduction is limited to 50% × dividends-received deduction (DRD) modified taxable income. DRD modified taxable income is calculated as taxable income before the dividends-received deduction, any NOL deduction, and capital loss carryback deduction. Because the loss of $10,000 is a current year loss and not a carryover, it is not an adjustment to taxable income when calculating modified taxable income. DRD modified taxable income is $90,000. Best's DRD deduction on its Year 1 tax return is limited to $45,000 (50% × $90,000).

My question is why aren't we adding the Dividends Received 100K plus the 90K taxable income before DRD? I thought that was the approach.

Graduated 05/2016.
NY CPA Candidate.
Public accounting.
FAR COMING UP 07/07/2016 !! GOD HELP ME.

[Tncincy]

I'm starting my afternoon session. Looking to do better today than yesterday.


@74phoenix I am looking at your question and looking for the formula for DRD.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Jack_J]

@74phoenix This is my 2 cents explaining the answer. Generally,if the Corp has a NOL before Dividend Received (DR) application , when the DR is applied and it translates to still a NOL for the Corp then the DRD ( 50%,65%,100% ) should still be applied to the existing/current NOL increasing the Taxable loss.
The exception to the rule is if there is a NOL before DR application and when the DR is applied it translates the NOL into a taxable income then DRD is the lower of the taxable income at (50%,65% or 100% )and the DRD %( 50%,65%,100%) multiplied by the DR.
So for the question applying the DR translates the NOL to a taxable income of $90 so the exception rule apply and therefore the DRD is the lower of $ 45 (50% x $90) and $50 (50% x $100).
Hope this helps.

[23]

@74phoenix, to add to @Jack_J‘s explanation, the reason you do not add the dividend to the 90k is because the 90k already includes the loss and dividend. That's my understanding.

WA candidate

[74phoenix]

Thanks to both. @23, I kept thinking it wasn't included in the taxable income of 90K yet, so I will have to assume it like you said.

Graduated 05/2016.
NY CPA Candidate.
Public accounting.
FAR COMING UP 07/07/2016 !! GOD HELP ME.

[Tncincy]

Welcome Jack_j . The drd explanation was very good. I found the information in the ninja notes but had no idea how to explain it. I did see the NOL and DRD in the question but was not sure of the drd rate for the taxable income. Very good explanation, writing it down. Keep studying hard gang. The clock is ticking.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[74phoenix]

Another question – this time on book income to taxable income questions.

The M-1 reconciliation of book income to taxable income would be as follows:

Book income: $ 140,000
Federal income tax expense deductible from book income, but not deductible for tax purposes
+40,000
=180,000

50% × $50,000 meal expenses not deductible for tax purposes, but deductible from book income:
+25,000

Taxable income
=$ 205,000

My original guess subtracted 25K, not added it. Please explain why 50% of the $50,000 meal expenses are disallowed for tax purposes??? And if disallowed, why would they be deductible from book income…and added here? I thought you can deduct 50% of meals still, but entertainment is the thing the TCJA changed.

Graduated 05/2016.
NY CPA Candidate.
Public accounting.
FAR COMING UP 07/07/2016 !! GOD HELP ME.

[Tncincy]

From m1 is for partnership so book expenses are different from taxable income. The 50% rule would apply when computing book income vs taxable income

It begins with a 75
Been here too long as a cheerleader....ready to pass

[Author]

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