[Anonymous]

If anyone saw the AICPA practice test I can’t figure out on the document review practice sim why the property is 63,763 or why the van is 25,388. It’s bothering me haha so if someone could explain why that would be great! I test on July 1st and am super nervous, thank you 🙂

[LA Livin]

Can you explain #2? I could explain the DRS

[Anonymous]

I only got 1, half of 3 and the research I didn't do well. I got all the multiple choice at least but these sims are scaring me. Right now I don't understand 2 but if I look at it more and understand I'll share.

[Anonymous]

the vehicle expense deduction 14,040 is the standard mileage rate x the year 2 business mileage

[LA Livin]

Yea I got the first right on #2 and then I got the other 3 wrong and I have no idea where they are getting the numbers. Please let me know if you figure it out. As for your question, I'm not sure about the first one but the 2nd is 25,388 because I think it is an exchange of like-kind business property. The realized gain is $6,912 on the disposal of the trade-in (9,000 trade-in value -2,088 of basis). Therefore, you take the lesser of the boot received (0) or the realized gain (6,912) for the recognize gain. Thus, the deferred gain is 6,912. Finally, you take the FMV of the new asset (32,300) and subtract the deferred gain (6,912) for a basis of $25,388.

[Anonymous]

I figured out the depreciation deduction! So you got to MACRS half year 5 year year 2 and multiply the .32 by 20,000 to get 6,400. Year 1 was .2 by 20,000 which is 4,000. 6,400-4,00 is 2,400

can you share with me on the S corp prob how you got either falcon's ordinary business income (440,000)or jennifer sullivan's basis (250,000)? thanks!

[Anonymous]

alright got this one from google do not remember becker covering but the actual expense method is all the expenses for year 2 (not the tickets and fines) x % of mileage towards business (75% since 24,000 is 75% 32,000) so this is the 9,750

[Anonymous]

I haven't looked at those SIMS yet, but I plan on committing them to memory because on my AUD exam I got one of the practice SIMS and it was the only one I didn't look up the solution for! (Argh!)

[studysled]

I was wondering about the S Corp AAA….I thought if an S Corp had never been a C Corp (as is the case in the question), then it doesn't have AAA….but it does in this question for some reason

[Julia]

Ok so it took me a while.

On Sim 2:
Line 3 I agree w the 75% of the exp of gas+insurance +repairs. 75% of total use was business.
Line 4 ??????
Line 5 ??????

On Sim 3:
line 2 u add sal +repairs +marc dep +pr tax +insurance +rent
Line 3: interest -charity did-cap loss (cuz pass thru)
Line 4: neg (penalties and fines)
Line 5: incom line 2 -line 3 -line 4 + Ben amt (100,000)- distributions
Line 6: ben amt 60k -half of Ben amt 50k +half of line 5

On Sim 5:
Line 1: ??????
Line 2: val on invoice
Line 3: value on invoice less extended warranty
Line 4: value of truck 32300 less (trade in 9000 – (value of 18125 less dep 16037)

[Author]

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