[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

[UCMCPA]

I thought the 80% ownership rule only applied when forming a Corporation and not a partnership?

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

[Anonymous]

@ IY247 I think you are getting the partnership and corporation formation rules confused. The 80% rule is Section 351 which is for corporate formations and not partnerships. There is no gain or loss on partnership transfers (unless services or boot is involved).

[Anonymous]

@ IY247 I think you are getting the partnership and corporation formation rules confused. The 80% rule is Section 351 which is for corporate formations and not partnerships. There is no gain or loss on partnership transfers (unless services or boot is involved).

[Kenada]

Oh .. Ok Thank you .. See i am going nuts ..

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

[Kenada]

Oh .. Ok Thank you .. See i am going nuts ..

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

[Anonymous]

Is the limitation on investment interest expense up to net investment income only for individuals? Is it fully deductible by corporations? Thanks

[Anonymous]

Is the limitation on investment interest expense up to net investment income only for individuals? Is it fully deductible by corporations? Thanks

[Kenada]

I believe this is correct for Individuals:-

Investment income, for the purpose of the investment interest expense deduction, “includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties).

Limit on Deduction

Generally, your deduction for investment interest expense is limited to your net investment income.

You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. The interest carried over is treated as investment interest paid or accrued in that next year.

You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued.

I don't believe limitation apply to C Corporations it self but more special rules to Closely held Corps – PSC and PHC's

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

[Kenada]

I believe this is correct for Individuals:-

Investment income, for the purpose of the investment interest expense deduction, “includes your gross income from property held for investment (such as interest, dividends, annuities, and royalties).

Limit on Deduction

Generally, your deduction for investment interest expense is limited to your net investment income.

You can carry over the amount of investment interest you could not deduct because of this limit to the next tax year. The interest carried over is treated as investment interest paid or accrued in that next year.

You can carry over disallowed investment interest to the next tax year even if it is more than your taxable income in the year the interest was paid or accrued.

I don't believe limitation apply to C Corporations it self but more special rules to Closely held Corps – PSC and PHC's

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

[Kenada]

Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), if land is found to be contaminated, which of the following parties would be least likely to be liable for cleanup costs?

A A trustee appointed by the owner of the land to manage the land.

B A minority stockholder of the public corporation that owned the land.

C A bank that foreclosed a mortgage on the land and purchased the land at the foreclosure sale.

D A parent corporation of the corporation that owned the land.

Why is B better answer than D ?

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

[Kenada]

Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), if land is found to be contaminated, which of the following parties would be least likely to be liable for cleanup costs?

A A trustee appointed by the owner of the land to manage the land.

B A minority stockholder of the public corporation that owned the land.

C A bank that foreclosed a mortgage on the land and purchased the land at the foreclosure sale.

D A parent corporation of the corporation that owned the land.

Why is B better answer than D ?

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

[Skrier]

@IY…if I understand the answer correctly, a minority stockholder would have limited liability and would be the least likely to be held liable for the clean-up cost.

While the Parent Company of a corporation that owns the land would be more likely to be held liable, since the Parent company would be assumed to know what the subsidiary company is doing.

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

[Skrier]

@IY…if I understand the answer correctly, a minority stockholder would have limited liability and would be the least likely to be held liable for the clean-up cost.

While the Parent Company of a corporation that owns the land would be more likely to be held liable, since the Parent company would be assumed to know what the subsidiary company is doing.

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

[Kenada]

Oh I misread the least.. part.

So a trustee would held more liable than a shareholder…

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

[Kenada]

Oh I misread the least.. part.

So a trustee would held more liable than a shareholder…

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

[Author]

Replies