[jeff]

REG Resources:

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

[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

[Anonymous]

ahh….. thnx Jennifer so if we were to calculate GP % and the amount received in year 1. Would it be GP % = 66% (e.g. 165,000/250,000) and amount received 66,000, or do you subtract the liability from the denominator making it GP% = 82.5% and amount received $82,500?

[Anonymous]

ahh….. thnx Jennifer so if we were to calculate GP % and the amount received in year 1. Would it be GP % = 66% (e.g. 165,000/250,000) and amount received 66,000, or do you subtract the liability from the denominator making it GP% = 82.5% and amount received $82,500?

[Heidi-O]

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

[Heidi-O]

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

[Anonymous]

Anyone in here studying for an October exam? I failed REG in July so i'm picking it back up now. Sitting October 5th. Starting back studying tomorrow. Final push!

[Anonymous]

Anyone in here studying for an October exam? I failed REG in July so i'm picking it back up now. Sitting October 5th. Starting back studying tomorrow. Final push!

[Heidi-O]

CPAForeigner NO!! I thought you would have made it. I'm so sorry. 🙁 But I am happy to see you passed BEC!!

Still, another trip to the mainland for you. Sorry to hear that. I was hoping for you!

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

[Heidi-O]

CPAForeigner NO!! I thought you would have made it. I'm so sorry. 🙁 But I am happy to see you passed BEC!!

Still, another trip to the mainland for you. Sorry to hear that. I was hoping for you!

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

[Anonymous]

@Heidi-O Thanks! I am sorry too. But i'm really glad I still passed BEC so taking two was still worth it. I would of had to go back up anyway if I had taken one and at least now, i've taken REG once before so I am a little more prepared to tackle this beast. I'm going to push myself knowing this will be my last exam and I will finally pass the CPA exam. 🙂

Good luck to you with your REG score!

[Anonymous]

@Heidi-O Thanks! I am sorry too. But i'm really glad I still passed BEC so taking two was still worth it. I would of had to go back up anyway if I had taken one and at least now, i've taken REG once before so I am a little more prepared to tackle this beast. I'm going to push myself knowing this will be my last exam and I will finally pass the CPA exam. 🙂

Good luck to you with your REG score!

[Heidi-O]

CubDom847 To add a little to Jennifer's explanation: It states in the problem that they were “assuming” the 50,000 mortgage on the property – that means that the owner of the property had a 50,000 mortgage and the buyers were going to assume that mortgage. So that makes the gross sale amount of 250,000.

If we followed through the transaction, they would receive 150,000 this year (the down payment and the assumption of the mortgage). Next year, they would get 100,000 plus any interest income that would receive from the loan to the buyer – the interest would be classified as interest income.

The GP% is 66%.

Don't worry, assignment of mortgages comes up in business law. Fun, Fun, Fun!!! (yuck..) 🙂

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

[Heidi-O]

CubDom847 To add a little to Jennifer's explanation: It states in the problem that they were “assuming” the 50,000 mortgage on the property – that means that the owner of the property had a 50,000 mortgage and the buyers were going to assume that mortgage. So that makes the gross sale amount of 250,000.

If we followed through the transaction, they would receive 150,000 this year (the down payment and the assumption of the mortgage). Next year, they would get 100,000 plus any interest income that would receive from the loan to the buyer – the interest would be classified as interest income.

The GP% is 66%.

Don't worry, assignment of mortgages comes up in business law. Fun, Fun, Fun!!! (yuck..) 🙂

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

[Kodiak]

Okay REGulators, I'm struggling with the Dividend Received Deductions (DRD) application rules. I'm using the Yaeger lectures and did not care for how Phil explained it. The Wiley book isn't really helping either.

I guess what's tripping me up is the rules on when to apply the reduction to either taxable income or the dividends received, and what type of situation dictates this. For example if the DRD creates a loss then…. or if you have a loss after Sales-COGS then you apply it to… that sort of thing. I'm just struggling on how to apply it given different scenarios. I know there's got to be a simple way to understand this.

Can somebody explain it in simple terms, the way they understand it? Thanks!

AUD - Pass
FAR - Pass
BEC - Pass
REG - Nov

[Kodiak]

Okay REGulators, I'm struggling with the Dividend Received Deductions (DRD) application rules. I'm using the Yaeger lectures and did not care for how Phil explained it. The Wiley book isn't really helping either.

I guess what's tripping me up is the rules on when to apply the reduction to either taxable income or the dividends received, and what type of situation dictates this. For example if the DRD creates a loss then…. or if you have a loss after Sales-COGS then you apply it to… that sort of thing. I'm just struggling on how to apply it given different scenarios. I know there's got to be a simple way to understand this.

Can somebody explain it in simple terms, the way they understand it? Thanks!

AUD - Pass
FAR - Pass
BEC - Pass
REG - Nov

[Author]

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