[jeff]

Resources:

Free Study Planner + REG NINJA Notes (Individual Tax): https://www.another71.com/cpa-exam-study-plan/

REG Exam Experience: https://www.another71.com/cpa-exam-forum/topic/reg-exam-experience-official-thread

[Nevergiveup2012]

Is there a conceptual difference of when a capital loss is considered short -term vs. long-term? Rather than memorizing the rules, I am just wondering if there's a logical explanation. Thank you.

BEC - 86 (8/31/12)
AUD - 97 (11/18/12)
REG - 83 (5/12/13)
FAR - 91 (12/2/13)
Done!!!

[Rukus]

Nevergiveup2012, I am not exactly sure what you are asking. Short-term/long-term capital losses are netted with any STCG/LTCG. IF there is a net capital loss (either ST or LT) then only individuals can use 3,000 to offset ordinary income (Corps can't) and carry the remaining loss forward (only Corps can carry-back capital losses 3yrs).

Tax code and logical explanation… lol jk

I don't know the history or the why, but generally capital losses only offset capital gains, similar to how passive losses only offset passive income (I know exceptions), and I assume the the gov't does this to minimize abuse of the rules where people could do all kinds of things in order to reduce their taxable income. Then, they decided to throw individuals a bone by letting them offset the 3k of capital losses each year, and letting Corps carry-back since they can't ever offset ordinary income with capital losses. (just my conjecture)

FAR - 81 (8/31/12)
AUD - 93 (10/19/12)
BEC - 79 (11/27/12)
REG - 92 (2/8/13) DONE! All 1st attempt!

[tncy]

Hello everyone,

i have a question people who had studied with Wiley Test Bank and took the actual exam. How do the questions in the wiley test bank have similarities with the actual test?

[Rukus]

For me, the wiley online test bank questions were harder and trickier than the real exam. The exam questions were more straight forward, imo.

FAR - 81 (8/31/12)
AUD - 93 (10/19/12)
BEC - 79 (11/27/12)
REG - 92 (2/8/13) DONE! All 1st attempt!

[Nevergiveup2012]

@Rukus – Thanks so much for the ST/LT capital gain explanation, I added your write up to my personal note. I was a little confused about the unused Corp capital losses that are carried over as a short-term cap loss ( 3 back/5 forward). The short-term in here threw me off as I expected it to be long-term as it carries forward five years (longer than 12 months).

Do you it important to memorize all the little details in Becker textbook that is not discussed in the lecture? Not to cut corners with my studying, but you can get overwhelm quickly with so much rules and regulations on taxes. What are some of the items that are beyond the scope of CPA test? I know that memorizing the phase out amounts is not necessary. That's all I know so far.

BEC - 86 (8/31/12)
AUD - 97 (11/18/12)
REG - 83 (5/12/13)
FAR - 91 (12/2/13)
Done!!!

[Rukus]

@Nevergiveup2012

How long it is carried forward doesn't have anything to do with the ST/LT status. The ST/LT status is determined by the holding period of the capital asset sold. If held for less than 12 months prior to sale then it's ST, if held 12 months or more at the time of sale it's LT. For individuals, the carry-forward (remember no carry-back for individuals) loss maintains it's status as either ST loss or LT loss. For Corps, the carry-back/forward will always be treated as ST only, regardless if it was LT loss in the year the capital asset was sold.

My REG exam was more conceptual than I expected; however, there are quite a few numbers that you need to know.

You are generally correct about not having to know every phaseout, but a common one you do need to remember is the phaseout of the rental passive loss exception of $25,000 (if you materially participated in the rental activity). This is phased out between 100k-150k of agi. There are more, but if it comes up often in your studying, and you are required to know it for a MCQ you come across in your review, then you should probably understand the concept and know the number just to be safe. That said, I wouldn't spend time trying to memorize the really complex phaseouts since those will likely not be tested.

PS – I am not stating anything that was or wasn't on my exam but merely things I took note of during my review.

FAR - 81 (8/31/12)
AUD - 93 (10/19/12)
BEC - 79 (11/27/12)
REG - 92 (2/8/13) DONE! All 1st attempt!

[will.i.am]

I have a question regarding the Ultramares rule I hope someone can help me with… Under this rule is the accountant liable to third parties and forseen parties?

I am confused because in the lecture, they said the accountant is liable to third parties and forseen parties, but when I answered a multiple choice it seems to say other wise.

Would appreciate if somebody can clear this up for me… 🙂 thx!

[kwonp702]

From what i understand about Ultramares, it only affects Ordinary Negligence Liability. The accountant must have known about a 3rd party or foreseen party (not foreseeable) in order for the 3rd party to sue the accountant for Ord Negligence.

FAR - 82
AUD - 95
BEC - 85
REG - 85

[tncy]

thanks rukus for the a bit comfort.

[KnightsCPA]

REG is really kicking my a**. I have put in 150 hours of studying so far and I'm still only averaging 70% on wiley test bank…Sigh. I'm not really sure what else to do but to keep doing mcqs and reading notes…

I'm really struggling with basis questions between like kind, corps, partnerships, I just get all the rules confused. 🙁

How is everyone else doing?

FAR - 83
AUD - 81
REG - 92
BEC - 87
ETHICS - Done

[sbarkerACPA]

@knightscpa I am struggling a bit too. My rough patch is on the gain/loss realized, recognized of like kind property. If anyone can put this in layman terms for me I would gladly appreciate it.

BEC: 74;81
AUD: 77
REG: 71; 80
FAR: 78
License for CPA----APPROVED
CPA Class of 2013

[Rukus]

@sbarker – The whole point of like-kind exchanges is to treat business transactions that are basically swapping similar business property in a fashion that is generally nontaxable (just merely realized, not recognized). However, there are certain situations where a like-kind exchange is taxable (recognized gain); this occurs when boot is received.

So, if you have a realized gain (FMV property received – basis of prop. given up) the only portion of that realized gain that would be recognized (taxable) is up to the amount of boot received.

Example:

10,000 FMV property received

(5,000) basis of property given up

= 5,000 realized gain (if 0 boot, then 0 recognized)

However, if there is 2,000 boot received, then 2,000 is recognized gain.

This may be overly-simplified, but I think it's important to be straight on the terminology. If you don't have the ninja notes for REG I would highly recommend them. Jeff has a good break-down of like-kind exchanges in there that is easy to understand and shows the different variables that you could see on the exam.

FAR - 81 (8/31/12)
AUD - 93 (10/19/12)
BEC - 79 (11/27/12)
REG - 92 (2/8/13) DONE! All 1st attempt!

[sbarkerACPA]

@Rukus thanks…

BEC: 74;81
AUD: 77
REG: 71; 80
FAR: 78
License for CPA----APPROVED
CPA Class of 2013

[foxcroftdr]

Hi,

Just had a confusion with Becker R2 question with AMT.

Here is the question:

Robert had AGI 100,000 and potential itemized deductions as follows:

Medical expenses (before percentage limitaions) 12000

state income taxes 4000

Real estate taxes 3500

Qualified housing and residence mortgage interest 10000

Home equity mortgage interest(used for personal debts) 4500

Charitable contributions (cash) 5000

What are Roberts Itemized deductions for AMT?

1. 17000

2. 19500

3. 21500

4. 25500

Becker says the answer is 1. (2000+10000+5000)

But charity should not be taken for AMT purposes right?

Also Interest to buy home mortgage should not be taken then why they have taken 10000 instead of 4500 to be taken for AMT?

[Rukus]

@foxcroftdr – Becker is correct. Charitable contributions ARE allowed for AMT, as well as interest on qualified home mortage. You are not allowed to deduct the home equity interest used for personal debts for AMT.

Regular deductions vs AMT:

med 4,500 (12k – 7.5k) vs 2,000 (12k – 10k)

state tax 4,000 vs 0

R/E tax 3,500 vs 0

Qual. mortg. int. 10,000 vs 10,000

HELOC int. 4,500 vs 0

charitable contr. 5000 vs 5000

Total 31,500 vs 17,000

BTW, this is an important topic so make sure you know it well. Hope this helps.

FAR - 81 (8/31/12)
AUD - 93 (10/19/12)
BEC - 79 (11/27/12)
REG - 92 (2/8/13) DONE! All 1st attempt!

[Author]

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