[jeff]

Welcome to the Q2 2017 CPA Exam Study Group for REG. 🙂

[thelatebloomer]

@CPA788: Good to know. I think I'm getting fairly comfortable with reading the AL, and if you can budget your time well I think you can really squeeze points out with it. There are just so many arbitrary rules to remember for tax, that I feel like it's a real advantage if you can use it efficiently. I'm starting to think that I should not be focusing on studying sims and ensure that I can confidently get through the MCQ testlets as quickly and accurately as possible so that I have plenty of time to make sure my answers are right on the sims.

With that said, something I've run into with the CPAExcel sims are sections that require you to answer with a positive or negative number, and it's not always clear which you should be using. Does anyone have any keys to knowing exactly which to use?

[Josh]

@sharpy Welcome back to REG! What you using to study? Just curious. I know it's tough to lose credits; and others do, too. You're not alone. I guess that's part of what this blog is about. That's tough that you were so close to your CPA, though. 2011 is a good break. Have you been busy with life since? You were that close then. I believe you can do this!

I recently lost BEC and have to start over. I'm getting close, too, on most of the exam, now. I definitely did not start out that way. I've been studying since 2014.

Does anyone have any suggestions on how to best understand self-employment, FUTA/FICA and SE tax? I'll provide an example if it does not violate anything.

For example:

An individual makes $23,000 from a W-2 retail cashiering job, $500 net income from self-employment as a consultant, and $2,000 net income self-employed in some network marketing service. How much SE tax does this individual have to pay? And how did you get your answer?

This chapter 5 self-employment and farming is not my best, but I embrace healthcare, education and farmers who drive Ford trucks.

(After all, it's what I drive in the city. There's probably some good country songs about that.)

Maybe that says too much or maybe not enough? Even though I've been a preparer with over 5 years experience, it seems like there's a lot to remember. My life's busy today. I bet life's busy for you all, too. Life doesn't usually slow down for anyone. That's what I hear, at least.

Bob Monette provided some good motivation on why to get the CPA asap:

Let's do this!

[Jacob Seemann]

Hello, So I am retaking Regulation after an attempt on March 10th (73…) on April 8th. So I saw three MCQ all similar format and I have never seen these before nor do I know the answer to them. It started of as “Jim owns 60% in a (Partnership/Corporation) with outstanding shares of 600k/Partnership Income of 500k – and Jim owns an asset with an adjusted basis of 70k and FMV of 100k and sells the asset to the LLP/Corp for lets say 50K.” I dont know if i have all of the details correct but the question is asking what is the recognized loss if you own equity in a partnership or corporation and sell them an asset for a loss. It says you are selling the asset for CASH not for more equity or ownership in the llc/corp. Hopefully this makes sense.

[thelatebloomer]

@jacob seemann: That question is testing whether you know the related partner transaction rule. The partner owns more than 50% of the partnership and is selling at a loss, so the loss recognized is 0.

[rachoconnor22]

I took REG today… MCQ were about what I expected (granted this was my first attempt) and the SIMS were brutal as expected. Good luck to everyone – don't fret about the new format!!

[thelatebloomer]

@rachoconnor22: When you say MCQ were about what you expected, what were you expecting? And can you elaborate what was brutal about the sims without giving away the questions?

[rachoconnor22]

I did all Wiley CPAExcel MCQ and about 700 NINJA MCQ and felt adequately prepared!

As far as SIMS, gosh… if you have done a lot of the practice ones you know that they are in depth and so that's what I mean by brutal, you just don't know what topics you have to know ALL the details about.

I also took Rogers timing advice and felt like it was not good advice in hindsight. They recommended only 30 minutes for the first SIM TBS and 1 hr for the last two and I wish I would have spread my time more evenly between the last three SIM TBS'.

Hope that helps!

[Teal]

Well…the new test was brutal, but I think it was more the timing. So REG was 4 hours instead of 3 and I felt very rushed on time to answer everything. Otherwise, it was the same. 2 testlets of 38 MCQs (too long in my opinion) and then 1 testlest of 2 TBS's and then 2 testlets of 3 TBS's. All the questions were the same and everything. It was just a lot of work to get through all of them timely. I think that was my biggest concern & I have may have left off & just submitted on some answers, where normally I would have had time to think about it for a bit. We will see!

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[jack yassa]

@Teal

There were any huge differences between your last exam and this one?!
I didn't open a book since my last exam in Feb 2017!

[CPA788]

@thelatebloomer – I've just recently started using Wiley and their SIMs and you're right, not clear at all with the +/-. The actual exam is very clear about when to enter negatives, decimals, etc. I always read SIMS super closely for that reason so I was quick to realize Wiley isn't great at clarifying.

Everyone is different on the study time of MCQ vs SIMS. Only on my first attempt at REG did I score strong on the SIMS, I've been weaker on the other attempts and kept me from a 75 for sure last time. I'm focusing a lot on SIMs this time, but that's just me. It's the little details in SIMS that take me down.

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[thelatebloomer]

@rachoconnor22: Thanks for sharing the detail. What do you think about 45 minutes per MCQ testlet, then spread the remaining 2 1/2 hours over the SIMs? I noticed that you can either get 8 or 9 sims. If you get 9, you should get the “extra” one in the 1st testlet before the break, right?

@Teal: How much time did you have left after the MCQs? I'm sensing that the real key to the new format is getting your pace down for MCQs so you have plenty of time for sims. I'm gonna practice sets of 40 questions and shoot for 45 min or less to get the timing down. I'm struggling with practice sims though. I seem to have the majority of the knowledge figured out, but miss on lots of little details.

[thelatebloomer]

@CPA788: Great to hear that I'm not the only one noticing that issue with the Wiley sims. It has been a little discouraging seeing so much red when I submit the testlet. The Ninja Audio and Ninja Notes seem so straightforward at this point compared to the details I'm getting burned on in sims. It seems like they hit you with 10 different variations in the same area for 1 sim, punishing any gaps at all. I feel a little better knowing that it probably won't be that bad on the real thing, because I do remember the sims I got on the first attempt were very straightforward (I just hadn't studied tax basically at all). I can also feel better knowing that most people are going to struggle with this many random points as well. I'm getting very used to the authoritative literature, so I'm hoping I pull some magic out of my butt with enough time. I will keep doing MCQ bursts and then mix in some grueling sims as a change of pace heading into the test on Thursday. I want to leave the exam knowing I put it all out there before I wait an eternity for my score and mentally move on to FAR.

[CPA788]

@thelatebloomer – I hear you. August is a lifetime away. Another way I like to use SIMs is to test my knowledge on a topic I feel good on. If I think I'm doing killer on corporate distributions and want the next step, I'll find a SIM that tests that and see if I can really knock it all out. You got it!

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[thelatebloomer]

Dart Inc., a closely held corporation, is petitioned involuntarily into bankruptcy under the liquidation provisions of Chapter 7 of the Federal Bankruptcy Code. Dart contests the petition.

Dart has not been paying its business debts as they become due, has defaulted on its mortgage‐loan payments, and owes back‐taxes to the IRS. The total cash value of Dart's bankruptcy estate, after the sale of all assets and payment of administration expenses, is $100,000.

Dart has the following creditors:

‐ Fracon Bank is owed $75,000 principal and accrued interest on a mortgage loan secured by Dart's real property. The property was valued at and sold, in bankruptcy, for $70,000.

‐ The IRS has a $12,000 recorded judgment for unpaid corporate income tax.

‐ JOG Office Supplies has an unsecured claim of $3,000 that was filed in timely fashion.

‐ Nanstar Electric Co. has an unsecured claim of $1,200 that was not filed in timely fashion.

‐ Decoy Publications has a claim of $14,000, of which $2,000 is secured by Dart's inventory that was valued and sold, in bankruptcy, for $2,000. The claim was filed in timely fashion.

Assume that the bankruptcy estate was distributed.

What dollar amount would Nanstar Electric Co. receive?

$0
$800
x $1,000
$1,200
You Answered Incorrectly.
Of the $100,000, the first $70,000 will go to Fracon Bank, as that money was generated by the sale of the house in which they had a security interest. The next $2,000 will similarly go to Decoy as money raised from the sale of their security interest. This leaves $28,000. The next $12,000 will go to the IRS to satisfy their recorded judgment, leaving $16,000. All taxes are paid before general creditors are paid. The final $16,000 is divided pro rata among remaining creditors, since there is not enough to pay all of them in full. However, all general creditors who have filed a claim in a timely fashion must be fully repaid before those who have not timely filed are paid a dime. Therefore, all cash will be used up before Nanstar collects anything.

What am I missing? The 2 creditors that filed in a timely fashion total $15,000, leaving $1000 remaining. Is the bank with the mortgage interest considered one that filed in a timely fashion?

[539Mayor]

Just took the reg exam..any thoughts on the section I should take. Looking to get it in before the June black out.

[Author]

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