[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

[mrogovitz]

@Heidi-O and Jennifer241, thank you!

AUD: Attempt 1: 60; Attempt 2: 78
BEC: Attempt 1: 75 (lost credit); Attempt 2: 80
FAR: Attempt 1: 74; Attempt 2: 74; Attempt 3: 78
REG: Attempt 1: 76 (lost credit); Attempt 2: 68; Attempt 3: 80

Finished 11/01/2013!!!

[mrogovitz]

@Heidi-O and Jennifer241, thank you!

AUD: Attempt 1: 60; Attempt 2: 78
BEC: Attempt 1: 75 (lost credit); Attempt 2: 80
FAR: Attempt 1: 74; Attempt 2: 74; Attempt 3: 78
REG: Attempt 1: 76 (lost credit); Attempt 2: 68; Attempt 3: 80

Finished 11/01/2013!!!

[Anonymous]

Taking my test Tom and my kid wakes up sick with strep , spent the whole morning at the Dr and now she cant go to camp.. Was suppose to spend the whole day cramming everything I can before the test tom.. ugh! such bad timing

[Anonymous]

Taking my test Tom and my kid wakes up sick with strep , spent the whole morning at the Dr and now she cant go to camp.. Was suppose to spend the whole day cramming everything I can before the test tom.. ugh! such bad timing

[Heidi-O]

CPAwanabe I don't know when your test was scheduled for (or your time zone) but my testing center allows us to reschedule if it is more than 24 hours prior to the test. Do you have that option? Also, you have prepared a lot for this exam, you might surprise yourself when you take it. (Just wishing you well!!) 🙂

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

[Heidi-O]

CPAwanabe I don't know when your test was scheduled for (or your time zone) but my testing center allows us to reschedule if it is more than 24 hours prior to the test. Do you have that option? Also, you have prepared a lot for this exam, you might surprise yourself when you take it. (Just wishing you well!!) 🙂

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

[Anonymous]

Is anyone here able to help me understand the following installment sales MCQ. The answer says its $165,000 but I came up with $115,000. I thought for installment sales, the liability doesn't come into play until you are computing contract price (sales price – liability) in the denominator of the GP % part of the formula. Here we are just computing the numerator or GP. The answer says that you add the liability. I arrived at my answer as follows: 200,000-75,000-10,000 = 115,000 Gross Profit Thanks for your help.

In year 1, a taxpayer sold real property for $200,000, receiving $100,000 at closing and $100,000 plus accrued interest at the prime rate in the next year. The buyer also assumed a $50,000 mortgage on the property. The taxpayer's adjusted basis was $75,000, and the taxpayer incurred $10,000 of selling expenses. If this transaction qualifies for installment sale treatment, what is the gross profit on the sale?

a. $115,000

b. $125,000

c. $165,000

d. $175,000

[Anonymous]

Is anyone here able to help me understand the following installment sales MCQ. The answer says its $165,000 but I came up with $115,000. I thought for installment sales, the liability doesn't come into play until you are computing contract price (sales price – liability) in the denominator of the GP % part of the formula. Here we are just computing the numerator or GP. The answer says that you add the liability. I arrived at my answer as follows: 200,000-75,000-10,000 = 115,000 Gross Profit Thanks for your help.

In year 1, a taxpayer sold real property for $200,000, receiving $100,000 at closing and $100,000 plus accrued interest at the prime rate in the next year. The buyer also assumed a $50,000 mortgage on the property. The taxpayer's adjusted basis was $75,000, and the taxpayer incurred $10,000 of selling expenses. If this transaction qualifies for installment sale treatment, what is the gross profit on the sale?

a. $115,000

b. $125,000

c. $165,000

d. $175,000

[MurphyNish]

Can anyone explain this question to me ? I am having a mental block…

Strom acquired a 25 percent interest in Ace Partnership by contributing land having an adjusted basis of $16,000 and a fair market value of $50,000. The land was subject to a $24,000 mortgage, which was assumed by Ace. No other liabilities existed at the time of the contribution. What was Strom's basis in Ace?

why is Strom's basis not 10,000?:

Strom's land contributed adj. basis $16000

less: % of liability (.25*24000) (6000)

Storms basis= why is it zero?

I though % of interest is the amount you reduce the basis by?

[MurphyNish]

Can anyone explain this question to me ? I am having a mental block…

Strom acquired a 25 percent interest in Ace Partnership by contributing land having an adjusted basis of $16,000 and a fair market value of $50,000. The land was subject to a $24,000 mortgage, which was assumed by Ace. No other liabilities existed at the time of the contribution. What was Strom's basis in Ace?

why is Strom's basis not 10,000?:

Strom's land contributed adj. basis $16000

less: % of liability (.25*24000) (6000)

Storms basis= why is it zero?

I though % of interest is the amount you reduce the basis by?

[MurphyNish]

Nevermind I got it …

[MurphyNish]

Nevermind I got it …

[Anonymous]

@MurphyNish and for anyone else wondering.. its because the mortgage is more than the basis so it would make the basis zero and the partner would recognize a gain to get the basis to zero

16,000- basis

24000 x .75.. NOT .25 since you reduce the basis by the liability assumed by the other partners not the partner percentage.

= -2000

partner would recognize a 2000 gain and basis= 0

[Anonymous]

@MurphyNish and for anyone else wondering.. its because the mortgage is more than the basis so it would make the basis zero and the partner would recognize a gain to get the basis to zero

16,000- basis

24000 x .75.. NOT .25 since you reduce the basis by the liability assumed by the other partners not the partner percentage.

= -2000

partner would recognize a 2000 gain and basis= 0

[Jennifer241]

@Cubdom847

I would assume that the 100,000 + 100,000 was paid in cash, of which the problem states part of it was interest, so that would lead me to believe that part of the 200,000 principle was still unpaid, so the buyer then got a loan for an additional 50,000.

So when it's all said in done, he got 100,000 at closing + 100,000 in cash the next year, and received the 50,000 from the buyer in year two when the buyer got a loan, making the sale price be 250,000.

FYI I don't like this question, interest payments are reported as interest income on Schedule B, not included in the purchase price to calculate the gain on a sale.

AUD - Jan 9,13 Pass
REG - Aug 30,13 Pass
BEC - Oct 26,13 Pass
FAR - Dec 4,13 Pass

Licensed CPA in the state of Oregon

[Author]

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