[jeff]

REG Resources:

Free REG Notes & Audio – https://www.another71.com/cpa-exam-study-plan

REG 10 Point Combo: https://www.another71.com/products-page/ten-point-combo

REG Score Release: https://www.another71.com/cpa-exam-scores-results-release

[Anonymous]

[Anonymous]

@Heidi-O Thanks for the encouragement it really does help. 🙂

I think one of the things that has me worried is that i'm studying for two this time which i have never done before, (even though one is a re-sit i haven't put in nearly as much hours for the re-sit, i'm mostly focusing on mcq and hoping that will be enough.

[Anonymous]

@Heidi-O Thanks for the encouragement it really does help. 🙂

I think one of the things that has me worried is that i'm studying for two this time which i have never done before, (even though one is a re-sit i haven't put in nearly as much hours for the re-sit, i'm mostly focusing on mcq and hoping that will be enough.

[HANH4HANH]

Thank you! another question:

Brooe, Inc, an S corporation, was organized on January 2 2012 with two equal shareholders. Each shareholder invested $5000 in brookes capital stock and each loaned $15000 to the corporation. Brooke then borrowed $60000 from a bank for working capital. Brooke sustained an operating loss of $90000 for the year ended December 31, 2012. If each shareholder materially participates in the corporation's business, how much loss can each shareholder claim on his 2012 income tax return

5000

50000

45000

20000

The answer is 20000. Why isn't it 45000? Is the borrowed money from the bank not added to basis?

FAR 4/13 done
AUD 5/13 waiting
REG 7/13
BEC 8/13

[HANH4HANH]

Thank you! another question:

Brooe, Inc, an S corporation, was organized on January 2 2012 with two equal shareholders. Each shareholder invested $5000 in brookes capital stock and each loaned $15000 to the corporation. Brooke then borrowed $60000 from a bank for working capital. Brooke sustained an operating loss of $90000 for the year ended December 31, 2012. If each shareholder materially participates in the corporation's business, how much loss can each shareholder claim on his 2012 income tax return

5000

50000

45000

20000

The answer is 20000. Why isn't it 45000? Is the borrowed money from the bank not added to basis?

FAR 4/13 done
AUD 5/13 waiting
REG 7/13
BEC 8/13

[silliepanda]

@ Han .. anyone can correct me if I am wrong, but the way I am looking at the answer is they are allowed to deduct a loss up to what they personally contributed? Again, if someone disagrees please correct me.

Also Han … back to your previous question about what is in the MCs .. did you ever review the AICPA Newly released questions? I am actually going through the 2011-2013 ones now instead of Becker. I feel I may have looked at some of these questions so many times I just know the response from looking at it and not the actual concept. I am finding when I go through these I am actually pretty good on most of the questions. Just an idea!! If you need to know where to find them let me know.

BEC - TOO MANY FAILS TO LIST! July 2015 I WILL GET IT!
AUD - AUG 2015- NEVER PASSED!
FAR - LOST CREDIT
REG - PASSED

[silliepanda]

@ Han .. anyone can correct me if I am wrong, but the way I am looking at the answer is they are allowed to deduct a loss up to what they personally contributed? Again, if someone disagrees please correct me.

Also Han … back to your previous question about what is in the MCs .. did you ever review the AICPA Newly released questions? I am actually going through the 2011-2013 ones now instead of Becker. I feel I may have looked at some of these questions so many times I just know the response from looking at it and not the actual concept. I am finding when I go through these I am actually pretty good on most of the questions. Just an idea!! If you need to know where to find them let me know.

BEC - TOO MANY FAILS TO LIST! July 2015 I WILL GET IT!
AUD - AUG 2015- NEVER PASSED!
FAR - LOST CREDIT
REG - PASSED

[Heidi-O]

Han In computing the shareholder's basis in an S Corporation stock, the shareholder is permitted to deduct (on a personal income tax return) the pro-rata share of the S Corporation loss subject to the loss limitation:

Loss Limitation = Basis + Direct Shareholder Loans – Distributions.

The S Corporation took the 60,000 loan from the bank, not one of the shareholders. Therefore, it is not included in the calculation. Even when the shareholder's guarantees the loan to the bank (signs a document stating that if the loan is not paid by the S Corp, they can come after him), it does not increase their basis in an S Corp.

When you get into partnerships, their rules are different because the liabilities do increase the partner's basis. Because the structure is different.

FAR Aug 2012 79
AUD Oct 2012 84
REG Aug 2013 87
BEC Jan 2013 80

[Heidi-O]

Han In computing the shareholder's basis in an S Corporation stock, the shareholder is permitted to deduct (on a personal income tax return) the pro-rata share of the S Corporation loss subject to the loss limitation:

Loss Limitation = Basis + Direct Shareholder Loans – Distributions.

The S Corporation took the 60,000 loan from the bank, not one of the shareholders. Therefore, it is not included in the calculation. Even when the shareholder's guarantees the loan to the bank (signs a document stating that if the loan is not paid by the S Corp, they can come after him), it does not increase their basis in an S Corp.

When you get into partnerships, their rules are different because the liabilities do increase the partner's basis. Because the structure is different.

FAR Aug 2012 79
AUD Oct 2012 84
REG Aug 2013 87
BEC Jan 2013 80

[Heidi-O]

@silliepanda That was very nice of your finance to be so supportive of you! I think it is hard for people who are not going through this to understand what it is like. They do, however, see how we are responding to it. And if they are supportive, they are waiting for us at the finish line cheering us on!!! That's always a good feeling. 🙂

@cpaforeigner I don't know your personal situation, but why are you trying to take BEC right behind REG? You have an additional month in there to get prepared. Or does your exam date expire? Personally, I would move BEC to August to give me time to focus on it and to allow me time to focus on REG and not panic about the two together. Just a thought. But I understand the whole exam expiration thing and demands that can exist from outside of this beloved environment called the CPA exam. 🙂

FAR Aug 2012 79
AUD Oct 2012 84
REG Aug 2013 87
BEC Jan 2013 80

[Heidi-O]

@silliepanda That was very nice of your finance to be so supportive of you! I think it is hard for people who are not going through this to understand what it is like. They do, however, see how we are responding to it. And if they are supportive, they are waiting for us at the finish line cheering us on!!! That's always a good feeling. 🙂

@cpaforeigner I don't know your personal situation, but why are you trying to take BEC right behind REG? You have an additional month in there to get prepared. Or does your exam date expire? Personally, I would move BEC to August to give me time to focus on it and to allow me time to focus on REG and not panic about the two together. Just a thought. But I understand the whole exam expiration thing and demands that can exist from outside of this beloved environment called the CPA exam. 🙂

FAR Aug 2012 79
AUD Oct 2012 84
REG Aug 2013 87
BEC Jan 2013 80

[stokey45]

So I took my Final Exam today using my Becker review material. I did not do as well as I had hoped but I went back and understood what I did wrong and feel I learned from it so that I can get the correct answer the next time. I have done this before on other sections and it does help a great deal, and yes ultimately I passed that exam.

So, for those of you who feel defeated (as I have on many occasions), keep going and try not to let it get you down. Remember any review questions, tests, or quizzes you did not do well on, it is a REVIEW and use it as a learning tool.

I am writing this not just for the benefit of others, but to remind myself as well.

I am going back to REVIEW again. Test is TOMORROW!

[stokey45]

So I took my Final Exam today using my Becker review material. I did not do as well as I had hoped but I went back and understood what I did wrong and feel I learned from it so that I can get the correct answer the next time. I have done this before on other sections and it does help a great deal, and yes ultimately I passed that exam.

So, for those of you who feel defeated (as I have on many occasions), keep going and try not to let it get you down. Remember any review questions, tests, or quizzes you did not do well on, it is a REVIEW and use it as a learning tool.

I am writing this not just for the benefit of others, but to remind myself as well.

I am going back to REVIEW again. Test is TOMORROW!

[Anonymous]

I hope this isn't a stupid question but can someone explain why taxes are not allowed in regard to AMT itemized deductions? i am getting the adjustments mixed up where taxes are added back. An explanation would be greatly appreciated.

Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:

Medical expenses (before percentage limitations)

$12,000

State income taxes

4,000

Real estate taxes

3,500

Qualified housing and residence mortgage interest

10,000

Home equity mortgage interest (used to consolidate personal debts)

4,500

Charitable contributions (cash)

5,000

What are Robert's itemized deductions for alternative minimum tax?

a.

$17,000

b.

$21,500

c.

$25,500

d.

$19,500

Explanation

Choice “a” is correct. Robert's itemized deductions for alternative minimum tax purposes are calculated as follows:

Medical expenses (exceeding 10% of AGI)

$2,000

State income taxes (not allowed)

−

Real estate taxes (not allowed)

−

Qualified housing and residence interest

10,000

Home equity mortgage interest (not used to buy,

build, or improve the home-not allowed)

−

Charitable contributions (no difference)

5,000

Alternative Minimum Itemized deductions

$17,000

[Anonymous]

I hope this isn't a stupid question but can someone explain why taxes are not allowed in regard to AMT itemized deductions? i am getting the adjustments mixed up where taxes are added back. An explanation would be greatly appreciated.

Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:

Medical expenses (before percentage limitations)

$12,000

State income taxes

4,000

Real estate taxes

3,500

Qualified housing and residence mortgage interest

10,000

Home equity mortgage interest (used to consolidate personal debts)

4,500

Charitable contributions (cash)

5,000

What are Robert's itemized deductions for alternative minimum tax?

a.

$17,000

b.

$21,500

c.

$25,500

d.

$19,500

Explanation

Choice “a” is correct. Robert's itemized deductions for alternative minimum tax purposes are calculated as follows:

Medical expenses (exceeding 10% of AGI)

$2,000

State income taxes (not allowed)

−

Real estate taxes (not allowed)

−

Qualified housing and residence interest

10,000

Home equity mortgage interest (not used to buy,

build, or improve the home-not allowed)

−

Charitable contributions (no difference)

5,000

Alternative Minimum Itemized deductions

$17,000

[Author]

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