[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/

[McGboye]

The first one (office furniture) has a recovery period of 7 years. The rate is 14.29% for the first year. The pickup truck and computer and printers have 5 years recovery. On the MACRS table that is 20% for the first year

[McGboye]

REG today for me!

[Lamis]

@Mcgboy good luck!! Let us know what happened my reg on 5

[Operation_CPA]

How in depth are you guys diving into AMT? Is memorizing the exemption amounts a waste of brain power?

[McGboye]

Thanks man.

It wasn't as tough as I feared although I didn't do quite as well as I would have hoped. I hope I get 75 although I'm not that confident 🤦‍♂️.

They actually repeated a SIM question from when I first wrote REG. I found that strange – I'm sure it was the same figures even. Something to do with Decedent estate tax and Forms 1040 & 1041.

[Lamis]

@mcgboy thanks for sharing! Hopefully u crushed the exam 👍 Good luck

[CanPassAttitude]

Anyone able to help me out with this Wiley Simulation? Been at it for awhile and not sure if Wiley is not working properly. When I go to review the answer, it is blank and have attempted this multiple times; however, each cell shows up red each time I submit the testlet.

TBSRCO0501 Section 1250 Recapture
Lucas is married and owns Video Productions Company, which began operations in 2012. The business has always been reported as a sole proprietorship on Lucas's tax return.

Video Productions owns a factory with the following tax characteristics:

Original cost $300,000
Depreciation Claimed $40,000
Straight-Line Depreciation $40,000
Current Fair Market Value $360,000
Holding Period 4 years
On January 1, 2017, Lucas sold the building for its current fair market value. Compute the recognized gain on this sale and show the amount of gain for each of the character types shown in the below matrix.

Total Gain _______________

Ordinary Income _______________

Gain taxed at 25% rate _______________

Capital Gain _______________

Section 1231 Gain _______________

[samantha09]

Posted this in a thread but got no responses, sorry to double post 🙁

For Becker users there's a PDF link for 2017 AICPA Newly Released Questions. Specifically, on Page 45 there's a SIM that has me extremely confused and making me doubt myself.
It's labeled as Task 85550-01

1) For one of the solutions it mentions that if there is a gift tax paid, the basis is increased by the gift tax that is attributable to the appreciation in the value of the gift.

I'm super confused as to where this is even coming from as I have never seen this discussed in Becker or the Ninja notes in such detail as this problem takes it. I've read somewhere that the basis increases by the gift tax paid but I've never heard of the lengthy calculation they do in the solution relative to the appreciation.

For the solution column labeled “Year 2 Gift Amount subject to tax” they often say in the solution that this answer is the amount in excess of FMV.
I am confused by this as well as I thought the basis for gifts was rollover basis, and THEN in the event of selling it the gift rules apply where you consider FMV.

I would appreciate any help or clarification from any one who has gone over this sim and could provide some clarity or would be willing to take a look at it for review if testing this week too. Thanks!

[HoldMyBeerCPA]

Fern received $30,000 in cash and an automobile with an adjusted basis and market value of $20,000 in a proportionate liquidating distribution from EF Partnership. Fern's basis in the partnership interest was $60,000 before the distribution. What is Fern's basis in the automobile received in the liquidation?

$30,000

$20,000

$10,000

$0

At this point, I think I have a base understanding of liquidations. However, it is this “proportionate” liquidation that's foreign to me. I don't recall too much of this type of liquidation being covered in the Roger course, but from what I understand, this type of liquidation is a complete liquidation, but the partner doesn't recognize a gain/loss? So the basis that would be taken is the amount that reduces the partner's basis to zero after accounting for the cash received?

Will someone please let me know if my understanding is correct?

[Paolita]

Hi Good luck on the exam. I'm on the same boat. Taking my test at the end of the week.

In a complete liquidation the partner recognizes gain only to the extent that money received exceeds the partner basis in the partnership. Also you must 0 out to get out

Partner Basis was 60,000
Less cash received -30,000
Remaining basis 30,000
Automobile basis is therefore the entire 30,000 left as this will leave the basis at 0.

[Lamis]

What's the difference between capital losses and personal losses? So confused
For example personal automobile ? Is it capital asset? And when sold in loss why not deducted???

[joonpark1212]

@maj1028 appreciate the explanation on the capital accounts now i get it!

@Lamis I recall Rogers saying that personal losses are like consumption losses, thus not deductible. But personal use property(automobile) will be considered as a capital asset, so it when sold it could result in a capital loss. The wording of personal, personal-use, personalty confuses me too.

[EastCoastGirl22]

@Lamis ok so can anyone else jump in to clarify – I'm literally going through becker final review now and in section “Acquisition and Disposition of Assets” they have the WRaP losses disallowed, and it says Personal losses on disposition of nonbusiness assets (e.g. sale of personal vehicle) are disallowed. gains are taxed……so is it a capital asset or not…so confused.

[Lamis]

Ok after some search , I figured this out
Personal automobiles and homes are capital assets but still those 2 are not deductible

[EastCoastGirl22]

@Lamis – got it -thanks!!

[Author]

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