REG Study Group July August 2013 - Page 41

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  • July 2, 2013 at 1:36 pm #439217
    mscdngal
    Member

    Hey everyone! I will be taking REG in August. This will be my first CPA exam ever! Of course have the jitters since not knowing exactly what to expect. REG can definitely be overwhelming at time with all the material that is covered. My plan is to plow through my lessons so I can leave a two week window to review non stop with my notes and MCQ's.

    Good luck to all taking their exams in July & Aug! We can do this!

    July 2, 2013 at 1:36 pm #439364
    mscdngal
    Member

    Hey everyone! I will be taking REG in August. This will be my first CPA exam ever! Of course have the jitters since not knowing exactly what to expect. REG can definitely be overwhelming at time with all the material that is covered. My plan is to plow through my lessons so I can leave a two week window to review non stop with my notes and MCQ's.

    Good luck to all taking their exams in July & Aug! We can do this!

    July 2, 2013 at 2:52 pm #439219
    Anonymous
    Inactive

    Hey everyone! Just joined this forum today. I'm taking REG July 10th which will be my first attempt at my first exam. Saying that I am completely freaking out already is an understatement. Any suggestions as to how to review for this would be greatly appreciated! I'm using Becker Self Study. Good luck to everyone with their upcoming exams!

    July 2, 2013 at 2:52 pm #439366
    Anonymous
    Inactive

    Hey everyone! Just joined this forum today. I'm taking REG July 10th which will be my first attempt at my first exam. Saying that I am completely freaking out already is an understatement. Any suggestions as to how to review for this would be greatly appreciated! I'm using Becker Self Study. Good luck to everyone with their upcoming exams!

    July 2, 2013 at 3:08 pm #439221
    icanhazcpa
    Member

    @peetree I realize it's not taxable to them, but what I'm wondering is how the recipient records the basis. At what amount do they record the asset on their books?

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:08 pm #439223
    icanhazcpa
    Member

    Double post sorry

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:08 pm #439369
    icanhazcpa
    Member

    Double post sorry

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:08 pm #439368
    icanhazcpa
    Member

    @peetree I realize it's not taxable to them, but what I'm wondering is how the recipient records the basis. At what amount do they record the asset on their books?

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:24 pm #439225
    peetree
    Member

    @icanhazcpa it depends. In general, gifted property takes the donors basis as the basis the donee will have. If the fair market value is lower than the roll-over basis, and the donee sells the gifted property between the rollover basis and the fmv, no gain or loss is recognized. If the donee sells the gifted property for greater than the rollover basis, the gain is calculated by subtracting the gain from the selling price. The gain characteristics would take on the holding period of the donor in this case. Finally, if the selling price is lower than the fmv at the time of the gift, the loss is calculated by subtracting the selling price from the fmv. The loss characteristics for this transaction would be determined by when the donee received the property NOT the donors rollover holding period.

    That was a lot. Here is an example I'll make up.

    John gifted Robert property, he purchased 2 years ago for $3,000, yesterday. The FMV of the property at the time of gift was $2500.

    What gain income does Robert recognize upon receiving the gift from John? Answer: NONE! gifts are tax free! YAYY!!!!

    If Robert sells the property for $2750, how much gain or loss will Robert recognize? Answer: NONE! selling price is between basis, and FMV!

    If Robert sells the property for $3500, how much gain or loss will Robert recognize? Answer: $500 LT CG because Robert uses the donors holding period of 2 years.

    If Robert sells the property TOMORROW for $2000, how much gain or loss will Robert recognize? Answer $500 ST CL because Robert uses the holding period of when he received the property (i.e. yesterday)

    Remember, in general, the taxpayer will use the donors basis AND holding period, unless the fmv at time of gift is lower than the basis, than you play the “where does the selling price lie” game.

    Hope this helps! It helps me in my studying before tonight because if I can teach it, I obviously can reproduce that knowledge on the exam.

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    July 2, 2013 at 3:24 pm #439371
    peetree
    Member

    @icanhazcpa it depends. In general, gifted property takes the donors basis as the basis the donee will have. If the fair market value is lower than the roll-over basis, and the donee sells the gifted property between the rollover basis and the fmv, no gain or loss is recognized. If the donee sells the gifted property for greater than the rollover basis, the gain is calculated by subtracting the gain from the selling price. The gain characteristics would take on the holding period of the donor in this case. Finally, if the selling price is lower than the fmv at the time of the gift, the loss is calculated by subtracting the selling price from the fmv. The loss characteristics for this transaction would be determined by when the donee received the property NOT the donors rollover holding period.

    That was a lot. Here is an example I'll make up.

    John gifted Robert property, he purchased 2 years ago for $3,000, yesterday. The FMV of the property at the time of gift was $2500.

    What gain income does Robert recognize upon receiving the gift from John? Answer: NONE! gifts are tax free! YAYY!!!!

    If Robert sells the property for $2750, how much gain or loss will Robert recognize? Answer: NONE! selling price is between basis, and FMV!

    If Robert sells the property for $3500, how much gain or loss will Robert recognize? Answer: $500 LT CG because Robert uses the donors holding period of 2 years.

    If Robert sells the property TOMORROW for $2000, how much gain or loss will Robert recognize? Answer $500 ST CL because Robert uses the holding period of when he received the property (i.e. yesterday)

    Remember, in general, the taxpayer will use the donors basis AND holding period, unless the fmv at time of gift is lower than the basis, than you play the “where does the selling price lie” game.

    Hope this helps! It helps me in my studying before tonight because if I can teach it, I obviously can reproduce that knowledge on the exam.

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    July 2, 2013 at 3:35 pm #439227
    icanhazcpa
    Member

    @peetree thank you very much for your explanation. OK so if I get a gift today and the FMV is lower than rollover and I'm not going to sell it any time soon, that is where my confusion lies. I can't use the selling test because I don't plan to sell. So will I just take the rollover as my basis?

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:35 pm #439373
    icanhazcpa
    Member

    @peetree thank you very much for your explanation. OK so if I get a gift today and the FMV is lower than rollover and I'm not going to sell it any time soon, that is where my confusion lies. I can't use the selling test because I don't plan to sell. So will I just take the rollover as my basis?

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

    July 2, 2013 at 3:39 pm #439229
    peetree
    Member

    @icanhazcpa

    If you receive it today, and don't plan on selling it anytime soon, you'll have to wait till you do sell it before figuring out how much gain or loss you should recognize and what your holding period will be.

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    July 2, 2013 at 3:39 pm #439375
    peetree
    Member

    @icanhazcpa

    If you receive it today, and don't plan on selling it anytime soon, you'll have to wait till you do sell it before figuring out how much gain or loss you should recognize and what your holding period will be.

    FAR 02/21/13 - 95
    REG 07/02/13 - 87
    AUD 08/02/13 - 94
    BEC 08/30/13 - 85
    Ethics Exam - 90

    Illinois candidate awaiting his license

    Used Becker Self Study | Ninja Audio | Becker Flash Cards | Ninja Notes | Wiley Test Bank

    July 2, 2013 at 3:42 pm #439231
    icanhazcpa
    Member

    @peetree ok maybe I'll still in FAR world, but would I not have to record some kind of basis in the property? That's my question is basis. What amount am I going to show for that asset?

    BEC - 83
    FAR - 83
    REG - 74, 78
    AUD - 76

    Becker Self Study

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