[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

[Kenada]

This question kind of annoyed me.

When I read this. 600,000 includes the 50,000 accrual. Actual bonus paid was 60,000….. the answer I wanted isn't hear and the answer they gave made me feel this question is not well written. Unless my interpretation above is wrong.

Soma Corp. had $600,000 in compensation expense for book purposes in 2012. Included in this amount was a $50,000 accrual for 2012 nonshareholder bonuses. Soma paid the actual 2012 bonus of $60,000 on March 1, 2013. In its 2012 tax return, what amount should Soma deduct as compensation expense?

$600,000

$540,000

$610,000

$550,000

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

[Skrier]

IY..I think the answer is C, $610, 000 because 50k is already accrued and they paid an additional 10k, so you only need to add 10k to the original 600k.

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

[Skrier]

IY..I think the answer is C, $610, 000 because 50k is already accrued and they paid an additional 10k, so you only need to add 10k to the original 600k.

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

[Kenada]

In this case, since Soma’s $600,000 of compensation expense per books included bonuses of $50,000, while actual bonus payments totaled $60,000, its compensation expense on its 2012 tax return would be $600,000 + $10,000 = $610,000.

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

[Kenada]

In this case, since Soma’s $600,000 of compensation expense per books included bonuses of $50,000, while actual bonus payments totaled $60,000, its compensation expense on its 2012 tax return would be $600,000 + $10,000 = $610,000.

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

[Kenada]

Murd Corporation, a domestic corporation, acquired a 90% interest in the Drum Company in 2010 for $30,000. During 2013, the stock of Drum was declared worthless. What type and amount of deduction should Murd take for 2013?

Long-term capital loss of $30,000.

Long-term capital loss of $3,000.

Long-term capital loss of $15,000.

Ordinary loss of $30,000.

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

[Kenada]

Murd Corporation, a domestic corporation, acquired a 90% interest in the Drum Company in 2010 for $30,000. During 2013, the stock of Drum was declared worthless. What type and amount of deduction should Murd take for 2013?

Long-term capital loss of $30,000.

Long-term capital loss of $3,000.

Long-term capital loss of $15,000.

Ordinary loss of $30,000.

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

[Skrier]

That is an odd one IY…I say it is A

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

[Skrier]

That is an odd one IY…I say it is A

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

[Kenada]

D – Ordinary Loss of 30,000. Here we had to think it owned over 90% – therefore need to think of how sub's with over 80% ownership are treated.

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

[Kenada]

D – Ordinary Loss of 30,000. Here we had to think it owned over 90% – therefore need to think of how sub's with over 80% ownership are treated.

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

[smsingla]

I think answer should be D, because 1244 stock loss is ordinary if it is acquried from an affiliated corp

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[smsingla]

I think answer should be D, because 1244 stock loss is ordinary if it is acquried from an affiliated corp

REG 81
BEC 74,65,78
FAR 79
AUD 85 DONE!!!

[Kenada]

An individual had the following capital gains and losses for the year:

Short-term capital loss $70,000

Long-term gain (unrecaptured Section 1250 at 25%) 56,000

Collectibles gain (28% rate) 10,000

Long-term gain (15% rate) 20,000

What will be the net gain (loss) reported by the individual and at what applicable tax rate(s)?

A Short-term loss of $3,000 at the ordinary rate and long-term capital gain of $86,000 at the 15% rate.

B Long-term gain of $16,000 at the 15% rate.

C Short-term loss of $3,000 at the ordinary rate, long-term capital gain of $10,000 at the 15% rate, collectibles gain of $10,000 at the 28% rate, and Section 1250 gain of $56,000 at the 25% rate.

D Long-term capital gain of $3,000 at the 15% rate, collectibles gain of $10,000 at the 28% rate, and Section 1250 gain of $56,000 at the 25% rate.

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

[Kenada]

An individual had the following capital gains and losses for the year:

Short-term capital loss $70,000

Long-term gain (unrecaptured Section 1250 at 25%) 56,000

Collectibles gain (28% rate) 10,000

Long-term gain (15% rate) 20,000

What will be the net gain (loss) reported by the individual and at what applicable tax rate(s)?

A Short-term loss of $3,000 at the ordinary rate and long-term capital gain of $86,000 at the 15% rate.

B Long-term gain of $16,000 at the 15% rate.

C Short-term loss of $3,000 at the ordinary rate, long-term capital gain of $10,000 at the 15% rate, collectibles gain of $10,000 at the 28% rate, and Section 1250 gain of $56,000 at the 25% rate.

D Long-term capital gain of $3,000 at the 15% rate, collectibles gain of $10,000 at the 28% rate, and Section 1250 gain of $56,000 at the 25% rate.

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

[Author]

Replies