[ScottB07]

This is the first time I’ve posted anything on this site, but I’ve been looking over it periodically while studying and it seems to be a great resource so I thought why not. Anyway, I’m studying REG and it’s just as exciting as I imagined it would be…

I was wondering if anyone could help me try and better understand earnings and profits. When looking at the R3 notes, the “adjustments” that were added and subtracted had a starting point of taxable income. That list is beginning to make sense to me, but the homeworks threw me off. I did them the other day so I don’t remember the specifics at the moment, but the homework questions often used the started point at BOOK income and then asked you to get to E&P. And the answers seem to be opposite of what the adjustment list shows because now you’re working from book income rather than taxable income. I’m not sure if I should spend more time on looking at the list of adjustments in the R3 notes, or if I should take the hint that understanding the adjustments from book income (rather than taxable) might be more important. Am I over thinking this? Trying to focus on both is confusing me, and I think that if I focus on one I might be able to better understand the other. If anyone has any thoughts, general advice or study tips they used while trying to better understand this section of the material, any feedback would be greatly appreciated!!