[jeff]

REG Study Group Links and Resources:

1. NINJA Monthly – $67 REG Course
2. Free REG Notes
3. REG Course Comparison
4. How to Pass REG (with NINJA)
5. How to Pass REG (in 20 Days)
6. How to Pass REG (after Failing)

See Also:

• FAR Study Group
• AUD Study Group
• REG Study Group
• BEC Study Group

[April94]

Can someone help me with the question below?

In 2019, Uriah Stone received the following interest payments:

Interest of $400 on refund of federal income tax for 2017
Interest of $300 on award for personal injuries sustained in an automobile accident during 2016
Interest of $1,500 on municipal bonds
Interest of $1,000 on United States savings bonds (Series HH)
What amount, if any, should Stone report as interest income on his 2019 tax return?

The answer is $1,700. I understand why $400 and $1,000 are included, but why is the $300 also included? My Roger book says damages for bodily injury/pain/suffering are not included in income.

[Han]

The damages is excludible, but the interest on the damages is not.

[April94]

Thank you!

[jeff]

Happy Friday! For accountability/motivation, post your weekend REG study goals below.
–
Everyone loves a little incentive, so one randomly-chosen person will win a month of NINJA CPA Review Monthly.
–
Feel free to invite your CPA-studying friends to join in.
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One winner per study group (please only post in one forum study group)
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Deadline to comment: Tonight @ 11:59pm (Pacific)
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Another chance to win in the CPA Exam Review Facebook Group (yes, in theory, you could win twice):
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https://www.facebook.com/groups/cpaexamreview/

[se7en.14]

Are you allowed to deduct $3k of capital loss from ordinary income? I thought the deductions were allowed for capital gains.

[AbeFroman]

My weekend REG study goals are to (A) finally get started (now that April 15 has passed – yes, many clients still wanted theirs completed despite the pushed-back deadline) while being quarantined and (B) get through the first two sections of my review course – lectures, reading, and note-taking. I also would like to work at least 50 MCQs in each of those two sections.

[jeff]

Congrats Abe – you’re the winner! Please email jeff@another71.com. HIYA!

[monikernc]

Se7…print out the forms so you can learn the answer to your questions while you study. Knowing the forms will help you a lot during the exam.
Your net capital losses are limited to $3000/year and deducted on line 6 as an above the line deduction to get to total income on line 7b and AGI on line 8b.

FAR 7/25/15 76!
AUD 10/30/15 93
BEC 2/27/16 82
REG 5/23/16 88!
Ninja Book and MCQ and the forum - all the way!!!
and a little thing i like to call, time and effort!
if you want things to change, you have to do something different

[Such]

§ 448 – A corporation or partnership meets the gross receipts test of this subsection for any taxable year if the average annual gross receipts of such entity for the 3-taxable-year period ending with the taxable year which precedes such taxable year does not exceed $26 million.

Q: If we are checking for Yr 6, will it be the average of Yr 6, 5 & 4 or 5,4&3. Pls help!

How is it calculated per CPA review material you all are using?

[MIchelle]

Hello,

I believe it also includes the current year. Do you mind being specific as to what specific topic this relates to?

[Hannah]

“Qualified stock options are taxable in the year in which the stock is sold, not either in the year of grant, nor in the year of exercise” this was part of the explanation to an answer for Roger. I thought stock options were taxable both at the exercise date and sales date. Which is correct?

[ssaetern]

According to Roger “Because guaranteed payments represent ordinary business expenses of the partnership, they are included in the determination of the ordinary income of the partnership. They must also, however, be separately stated on the Schedule K-1 of each partner receiving such payments, so that the partner will include the income received on their individual tax return.”
Is this false? I thought guaranteed payments were deducted in calculation of ordinary income of a partnership???

[Icarito]

That is correct. Deduction on page 1 of 1065 to get to ordinary income.

Also income on Sch. K of 1065 flowing to individual K-1 so partner picks up their GP on Sch. E of their 1040.

[Eddie]

I am joining today for additional accountability/motivation purposes. My weekend REG study goals are to study 2 modules and do all the quesions. Thanks guys

[se7en.14]

Can someone show the calculation on how to get $430k? Thanks

In the current year, Vinton exchanged unimproved land for an apartment building. The land had a basis of $300,000, and a fair market value (FMV), of $420,000, and was encumbered by a $100,000 mortgage. The apartment building had an FMV of $550,000 and was encumbered by a $230,000 mortgage. Each party assumed the other's mortgage. What is Vinton's basis in the office building?
A.$300,000
B.$320,000
C.$430,000
D.$550,000

Answer – C.

[Author]

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