[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

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[terranz]

Hi @skrier since you have ninja notes have a few q's for ya:

1) did you spend much time on circular 230, transfer pricing or Statements on standards for Tax services?

2) for alimony recapture, has the ninja notes formula worked for you on any kind of alimony recap problem?

3) on page 50 of ninja notes, it says “no G/L if donor basis<sales price<FMV @ Gift date”

should it say, “no G/L if donor basis<sales price<FMV @ Gift date ( assuming FMV lower)

then on page 56, in property transactions, it says “sold in between donor's basis and FMV” no G/L which is correct.

There are actually way more details on Scorps and PHC than beckers covers, or ninja notes. How have you gone about handling Scorps and PHC?

[Skrier]

Terranz, I have spent a fair amount of time on Circular 230, but not nearly as much and individual and corporate taxation. As for the alimony recapture, I have not seen any questions on this in Becker, which has me a little concerned, but I think I have enough information to get through it if need be. I think the ninja notes are correct, but the assumption of a lower fair market value would be made. As for SCorps and PHC, I have only used Becker materials and Ninja notes for preparing. I find if I start looking items up in tax code or otherwise, I get confused easily with the additional information. Not sure if this answers your questions.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

Terranz, I have spent a fair amount of time on Circular 230, but not nearly as much and individual and corporate taxation. As for the alimony recapture, I have not seen any questions on this in Becker, which has me a little concerned, but I think I have enough information to get through it if need be. I think the ninja notes are correct, but the assumption of a lower fair market value would be made. As for SCorps and PHC, I have only used Becker materials and Ninja notes for preparing. I find if I start looking items up in tax code or otherwise, I get confused easily with the additional information. Not sure if this answers your questions.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[terranz]

@skrier it does answer some – yeah i guess if i go looking into every detail of phc and s corp it could be endless… there is so much material but you never know if you have enough for a 75…

what are your thoughts on transfer pricing and SSTS though?

and the portion on ninja notes on pg 50?

thanks!

[terranz]

@skrier it does answer some – yeah i guess if i go looking into every detail of phc and s corp it could be endless… there is so much material but you never know if you have enough for a 75…

what are your thoughts on transfer pricing and SSTS though?

and the portion on ninja notes on pg 50?

thanks!

[Skrier]

I just read through the transfer pricing section, didn't spend much time on it. I am familiar with it though.

Yes the exception for lower fair market value does apply to page 50 of the notes.

You also asked about Statement on Standard for Tax Services, I would make sure you have a good understanding of this topic. There are several questions in the Becker software on this topic.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

I just read through the transfer pricing section, didn't spend much time on it. I am familiar with it though.

Yes the exception for lower fair market value does apply to page 50 of the notes.

You also asked about Statement on Standard for Tax Services, I would make sure you have a good understanding of this topic. There are several questions in the Becker software on this topic.

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Kenada]

Sorry I have been Quiet today.. I have a issue that i hope someone can help me with… Kind of going bananas here. I have two question and I can't understand why the treatment of DRD is not the same. Why is it in Q1 – DRD is not limited yet in Q2 it is Limited.

Q1

In 2012, Tilden, Inc., had gross income from business operations of $500,000 and allowable business expenses of $625,000. Tilden also received $150,000 in dividends from Jefferson Corporation. Tilden owns 23% of the voting power and value of Jefferson. What is the amount of Tilden’s 2012 net operating loss?

A. $(125,000)

B. $(95,000)

C. $(80,000)

D. $0

Answer is B

Gross income from operations

$500,000

Dividend income

150,000

Less: Operating expenses

(625,000)

Gross income

$ 25,000

Less: Dividends-received deduction

(80% × $150,000)

(120,000)

Net operating loss

$ (95,000)

Q2

Snow Corporation owns a 20% interest in Hail Corporation, a domestic corporation. For 2012, Snow Corporation had gross receipts of $390,000, operating expenses of $400,000, and dividend income of $120,000 from Hail Corporation. The dividends were not from debt-financed portfolio stock. What is Snow Corporation’s dividends-received deduction for 2012?

A. $88,000

B. $96,000

C. $84,000

D. $24,000

Answer (A) is correct.

A corporation is allowed a deduction for 80% of dividends received from unaffiliated domestic corporations of which it owns at least 20% of the stock. The dividends-received deduction is limited to 80% of taxable income before inclusion of the dividends-received deduction, dividends-paid deduction, net operating loss deduction, capital loss carrybacks, and certain adjustments for extraordinary dividends. (Note this deduction is 70% of taxable income for dividends from less than 20%-owned corporations.) Eighty percent of Snow’s dividend income is $96,000. However, 80% of the taxable income before the dividends-received deduction is $88,000. This limit restricts the dividends-received deduction that can be claimed.

Gross business income

$390,000

Dividend income

120,000

Gross income

$510,000

Less operating expenses

(400,000)

Taxable income without dividends-

received deduction

$110,000

Deduction is lesser of:

80% of dividend income, or

$ 96,000

80% of taxable income without

dividend deduction

$ 88,000

FAR 05/27/14; 786/110 - Done !

[Kenada]

Sorry I have been Quiet today.. I have a issue that i hope someone can help me with… Kind of going bananas here. I have two question and I can't understand why the treatment of DRD is not the same. Why is it in Q1 – DRD is not limited yet in Q2 it is Limited.

Q1

In 2012, Tilden, Inc., had gross income from business operations of $500,000 and allowable business expenses of $625,000. Tilden also received $150,000 in dividends from Jefferson Corporation. Tilden owns 23% of the voting power and value of Jefferson. What is the amount of Tilden’s 2012 net operating loss?

A. $(125,000)

B. $(95,000)

C. $(80,000)

D. $0

Answer is B

Gross income from operations

$500,000

Dividend income

150,000

Less: Operating expenses

(625,000)

Gross income

$ 25,000

Less: Dividends-received deduction

(80% × $150,000)

(120,000)

Net operating loss

$ (95,000)

Q2

Snow Corporation owns a 20% interest in Hail Corporation, a domestic corporation. For 2012, Snow Corporation had gross receipts of $390,000, operating expenses of $400,000, and dividend income of $120,000 from Hail Corporation. The dividends were not from debt-financed portfolio stock. What is Snow Corporation’s dividends-received deduction for 2012?

A. $88,000

B. $96,000

C. $84,000

D. $24,000

Answer (A) is correct.

A corporation is allowed a deduction for 80% of dividends received from unaffiliated domestic corporations of which it owns at least 20% of the stock. The dividends-received deduction is limited to 80% of taxable income before inclusion of the dividends-received deduction, dividends-paid deduction, net operating loss deduction, capital loss carrybacks, and certain adjustments for extraordinary dividends. (Note this deduction is 70% of taxable income for dividends from less than 20%-owned corporations.) Eighty percent of Snow’s dividend income is $96,000. However, 80% of the taxable income before the dividends-received deduction is $88,000. This limit restricts the dividends-received deduction that can be claimed.

Gross business income

$390,000

Dividend income

120,000

Gross income

$510,000

Less operating expenses

(400,000)

Taxable income without dividends-

received deduction

$110,000

Deduction is lesser of:

80% of dividend income, or

$ 96,000

80% of taxable income without

dividend deduction

$ 88,000

FAR 05/27/14; 786/110 - Done !

[UCMCPA]

When you are doing the DRD deduction, if it CREATES A LOSS then it is not limited to taxable income.

Ordinarily it would be the lesser of the DRD x % OR the Taxable Income X %… however, in cases where taking the LARGER number creates a loss, you use that.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[UCMCPA]

When you are doing the DRD deduction, if it CREATES A LOSS then it is not limited to taxable income.

Ordinarily it would be the lesser of the DRD x % OR the Taxable Income X %… however, in cases where taking the LARGER number creates a loss, you use that.

FAR - 84
AUD - 94
REG - 86
BEC - 86

[Kenada]

Thank you UMCPA… Will my brain remember this… I hope so..

FAR 05/27/14; 786/110 - Done !

[Kenada]

Thank you UMCPA… Will my brain remember this… I hope so..

FAR 05/27/14; 786/110 - Done !

[Skrier]

Question…in a like kind exchange if boot is both paid and received, do you use the net amount when determining gain recognized??

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Skrier]

Question…in a like kind exchange if boot is both paid and received, do you use the net amount when determining gain recognized??

AUD- 84
FAR- 75
REG- 78...I am DONE!!!
BEC- 79

[Author]

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