[jeff]

Welcome to the Q3 2017 CPA Exam Study Group for REG. 🙂

Introduce yourselves and let your fellow NINJAs know when you plan to take your REG exam.

The Five Steps (NINJA Framework): https://www.another71.com/pass-the-cpa-exam/

[CPA so close, so far away]

If your Misc. Itemized Deductions were below the 2% threshold, then they were never deducted on schedule. Therefore, no need to add them back for AMT. You received no benefit on your regular tax liability.

[NVeg]

@CPA so close, so far away: Thanks!

It seems i'm having some difficulty remembering whether certain items belong in the computation of AMTI/AMT. I was watching a previous YouTube video from Jeff that was uploaded years ago, but if i'm not mistaken, some of it might be a pretty outdated (correct me if i'm wrong) and it appears that there's many things that are left out. I believe you add back Home Mortgage Interest unless it wasn't used to buy, build or improve a residence, and you add back Sch. A items above the 10 percent threshold.

I thought you add back for personal/state/local taxes, but I think I just found out that's not the case.

Was there any video or book that really helped anyone grasp AMT?

[CPA so close, so far away]

Becker has a good mnemonic…
PANIC TIME

Passive Act Losses
Accelerated Depreciation
NOLs
Installment Sales for Dealers
Contract differences

And always add back these schedule A items…

Taxes Paid
Interest (Except Mortgage interest and interest from a home equity loan used to improve the home)
Misc. Itemized Deductions from 2% floor
Exemptions (any personal exemptions…the $4,050 per dependent and yorself/spouse)

[NVeg]

@CPA so close, so far away: Am I missing something? You mentioned adding back Misc. Itemized Deductions from 2% floor, and yet less than 10 posts ago on this study group, I asked a question about Misc. Items and I was told they aren't included in AMT? (I believe)

I sure hope I'm lucky enough not to get a bunch of AMT questions :/

[CPA so close, so far away]

If you took ANY deduction for “Miscellaneous Itemized Deductions Subject to the 2%” on your Schedule A, you MUST add them back when computing AMTI.

Miscellaneous deductions NOT subject to the 2% floor are allowed. (like gambling losses). Hopefully that helps. Do a few problems and write out that mnemonic I wrote above and you'll be in good shape.

[BBHYX]

Can someone tell me what “practicing before the IRS” means in regards to circular 230? What counts as practicing before the IRS and what doesnt? Representing taxpayers? doing returns?

[NVeg]

@CPA so close, so far away: It looks like from what you sent me, it matches with this question because it adds back the personal exemption amount and property taxes paid. I just have to learn a little more and do more questions because I thought you would subtract the charitable contributions and I thought you added back the Tax-exempt interest.

Personal exemption: $4,050
Itemized deduction for personal property taxes: 2,500
Charitable contribution of capital gain property: 1,500
Net long‐term capital gain: 1,000
Excess of MACRS depreciation on personal property over depreciation computed using the 150% declining‐balance method: 600
Tax‐exempt interest from City of Chicago general obligation bonds: 400

What is the total amount of adjustments to taxable income for purposes of computing Curt’s alternative minimum tax for 2017?
$7,150

[CPA so close, so far away]

Because the AMT calculation starts with Regular Taxable Income, the charitable contributions are already deducted as a result of Schedule A. We are only adding back deductions that are not allowed for AMT.

[pharaoh]

Tom Lewis, an individual taxpayer, was assessed $250 in the current year for the construction of street lights in his neighborhood. It is thought that the street lights will reduce crime in the neighborhood. Tom's neighborhood is the only area of the city that is assessed the charges. Before the end of the year, Tom is assessed another $100 for repairing the street lights damaged in a storm. How much of the $350 paid by Tom is deductible as an itemized deduction in the current year?

A.$0

B.$100

C.$250

D.$350

FAR 8/2016
AUD 1/2017
REG TBD
BEC TBD

[CPATY]

@NVeg Think of adjustments/preferences that are part of the AMT calc as adjustments that you need to make due to items you have included in your tax return. As such, if the miscellaneous itemized deduction wouldn't have met the threshold, it'll mean that you won't be including it as an itemized deduction and not need to adjust for it within the AMT calc. Don't know if that helps, but that's how I tried to wrap my head around AMT. Also, not sure if you're using Becker, but I honestly memorized the PANICTIME PPP mnemonic that Becker provides and did the questions over and over again and it helped me grasp the information a little more.

[CPATY]

ahh it looks like i was a little late on my explanation, sorry for my response!

[passantsalama]

I am scoring an average score of 60% in the wiley practice exams. Any helpful study tips pleaseeeeee

[CPATY]

@Pharaoh would it be $0 ? on Becker R2-22 It was noted No special assessments are allowed. Would that be a special assessment?

[CPAIN2K17]

@cpaty its B. You're right, no special assessment, but he can deduct the $100 repair.

[BBHYX]

Just took Becker mock 1 and did not score that badly! Missed some stupid points on the sims due to instructions though, where becker was not clear about whether to put negatives or positives… hope the actual exam is clearer, which in my past experience, usually has been the case

[Author]

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