[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

[Kodiak]

Qlad — say for example you received a gift from a friend. They paid $50 for it (their basis) and the FMV of the gift on the day they gave it to you was $100. The numbers you need to pay attention to are the donor's basis, FMV on date of gift, and what the sales price you sell it at is.

If you sell it later on and the sales price is above the FMV of the gift — say $125 — you use the donor's basis. Your recognized gain in this case would be $75 (125-50).

However, if you sell it for less than the donor's basis — say $30 — then you would use the FMV on the date of the gift for the basis in determining the loss. Your recognized loss would be $70 (100-30).

Hopefully my understanding is correct. I only remember two words to keep this straight.. GAIN-BASIS, meaning a loss would use FMV.

AUD - Pass
FAR - Pass
BEC - Pass
REG - Nov

[smsingla]

Please help!!! I m doing OK when I do MCQs (80-85%) but when it somes to SIMs, I am completely lost. I donno what to do. There are so many rules and calculations which are neither covered in Wileys book nor in Wileys test bank MCQs but they are there in SIMs.

For eg. Nonliquidating distributions. I know the rules about year end distributions but when they r given in middle of the year and your CEP is -ve and AEP is +ve, calculation of taxable dividend income, year end E&P basis for corp, are not shown in book anywhere or even MCQs in the back of the book but are tested in Wiley test bank's MCQs.

What should I do to tackle this? I m totally panicking right now……

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

[smsingla]

Please help!!! I m doing OK when I do MCQs (80-85%) but when it somes to SIMs, I am completely lost. I donno what to do. There are so many rules and calculations which are neither covered in Wileys book nor in Wileys test bank MCQs but they are there in SIMs.

For eg. Nonliquidating distributions. I know the rules about year end distributions but when they r given in middle of the year and your CEP is -ve and AEP is +ve, calculation of taxable dividend income, year end E&P basis for corp, are not shown in book anywhere or even MCQs in the back of the book but are tested in Wiley test bank's MCQs.

What should I do to tackle this? I m totally panicking right now……

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

[jeff]

Introducing NINJA Denise – taking REG/FAR this window

https://www.another71.com/ninja-cpa-blogger-denise-1/

[jeff]

Introducing NINJA Denise – taking REG/FAR this window

https://www.another71.com/ninja-cpa-blogger-denise-1/

[Qlad]

@kodiak…got it!!… so if GAIN then BASIS…..if LOSS then FMV ….right? that was easy…if i am right

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[Qlad]

@kodiak…got it!!… so if GAIN then BASIS…..if LOSS then FMV ….right? that was easy…if i am right

FAR 72,71,81 🙂
AUD 64,71, 72, 75 🙂 I'm done !!!
REG 73, 74, 74, 84 🙂
BEC 76 🙂

[svwCPA72]

Qlad, I think what kodiak said applies to if the FMV of the property at date of gift is lower than the basis of the property

Per Becker

“General rule – Donor's Rollover Cost Basis

Property acquired as a gift generally retains the rollover cost basis as it had in the hands of the donor at the time of the gift. Basis is increased by any gift tax paid that is attributable to the net appreciation in the value of the gift. Gains and losses are calculated using this rollover cost basis (subject to the exception noted below)

Exception – lower FMV at date of gift

If the FMV at date of gift is lower than the rollover cost basis from the donor, the basis for the donee upon the donee's future selling price of the asset.

1) Sale of gift at price greater than donor's rollover basis (gain basis)

when a taxpayer sells a gift for greater than the rollover basis, the gain shall be the difference between the sale price and that rollover basis

ex

donor gives nodepreciable proprerty worth $3,000 and having an adjusted basis of $5,000 to taxpayer, who subsequently sells the property for $6,500. The taxpayer's gain will be $1,500 ($6,500 proceeds – $5,000 basis)

2) Sale of gift at price less than lower FMV (loss basis)

When a taxpayer sells the gift for less than the lower FMV at the date of gift, the basis of the gift for purposes of determining the loss is the FMV of the gitft at the time the gift was given.

ex

donor gives property worth $3,000 having an adjusted basis of $5,000 to taxpayer who subsequently sells the property for $1,000. The taxpayer's loss will be $2,000 ($3,000 FMV at date of gift – $1,000). (Note that loss may or may not be deductible on the taxpayer's income tax return, depending on the situation.)

3) Sale less than rollover cost basis but greater than lower FMV ( in the middle)

When a taxpayer sell a gift for a price less than the donor's rollover cost basis, but more than lower FMV at the date of gift, neither gain nor loss is recognized. the basis to the donee is the middle selling price.”

Sell higher —-> Use donor's basis to determine gain

Donor basis

Sell between —-> no gain or loss

Lower FMV at Date of gift

Sell lower —-> use lower FMV at date of gift to determine loss

BEC: 80(8/10) expired, 77(10/14)!!!
FAR: 79(11/10) expired, 80(8/14)!!!
REG: 66(7/11), 70(1/12), 70(4/12), 73(10/13), 79(5/14)!!
AUD: 43(8/11), 64(10/11), 65(2/12), 69(7/12) 64(10/12), 73(5/13), 64(7/13), 84(11/13)!!! Thank you Another71 for your help!

Becker, Ninja Notes, Audio, Flashcard and Wiley test bank
Yaeger and Wiley book for Audit

I AM DONE!!!!

[svwCPA72]

Qlad, I think what kodiak said applies to if the FMV of the property at date of gift is lower than the basis of the property

Per Becker

“General rule – Donor's Rollover Cost Basis

Property acquired as a gift generally retains the rollover cost basis as it had in the hands of the donor at the time of the gift. Basis is increased by any gift tax paid that is attributable to the net appreciation in the value of the gift. Gains and losses are calculated using this rollover cost basis (subject to the exception noted below)

Exception – lower FMV at date of gift

If the FMV at date of gift is lower than the rollover cost basis from the donor, the basis for the donee upon the donee's future selling price of the asset.

1) Sale of gift at price greater than donor's rollover basis (gain basis)

when a taxpayer sells a gift for greater than the rollover basis, the gain shall be the difference between the sale price and that rollover basis

ex

donor gives nodepreciable proprerty worth $3,000 and having an adjusted basis of $5,000 to taxpayer, who subsequently sells the property for $6,500. The taxpayer's gain will be $1,500 ($6,500 proceeds – $5,000 basis)

2) Sale of gift at price less than lower FMV (loss basis)

When a taxpayer sells the gift for less than the lower FMV at the date of gift, the basis of the gift for purposes of determining the loss is the FMV of the gitft at the time the gift was given.

ex

donor gives property worth $3,000 having an adjusted basis of $5,000 to taxpayer who subsequently sells the property for $1,000. The taxpayer's loss will be $2,000 ($3,000 FMV at date of gift – $1,000). (Note that loss may or may not be deductible on the taxpayer's income tax return, depending on the situation.)

3) Sale less than rollover cost basis but greater than lower FMV ( in the middle)

When a taxpayer sell a gift for a price less than the donor's rollover cost basis, but more than lower FMV at the date of gift, neither gain nor loss is recognized. the basis to the donee is the middle selling price.”

Sell higher —-> Use donor's basis to determine gain

Donor basis

Sell between —-> no gain or loss

Lower FMV at Date of gift

Sell lower —-> use lower FMV at date of gift to determine loss

BEC: 80(8/10) expired, 77(10/14)!!!
FAR: 79(11/10) expired, 80(8/14)!!!
REG: 66(7/11), 70(1/12), 70(4/12), 73(10/13), 79(5/14)!!
AUD: 43(8/11), 64(10/11), 65(2/12), 69(7/12) 64(10/12), 73(5/13), 64(7/13), 84(11/13)!!! Thank you Another71 for your help!

Becker, Ninja Notes, Audio, Flashcard and Wiley test bank
Yaeger and Wiley book for Audit

I AM DONE!!!!

[Kenada]

Yep I agree with what Kodiak and svwCPA72. That is the same understanding I have on Gift taxes.

I am finally back, a bit behind you folks but should be catching up this week. Fingers crossed.

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

[Kenada]

Yep I agree with what Kodiak and svwCPA72. That is the same understanding I have on Gift taxes.

I am finally back, a bit behind you folks but should be catching up this week. Fingers crossed.

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

[stoleway]

@Kodiak………The table below really helped me a lot when I was studying for REG.

When solving for problems of this nature, try to memorize this table and compare your answer side by side.

a). GIFT WHEN THE DONOR IS ALIVE

NO GAIN

Sales

(Adjusted Basis)

NO LOSS

Sales

(FMV)

b). GIFT WHEN DONOR IS DEAD (BEQUEST)

GAIN OR LOSS

Sales

(FMV)

You will be able to solve most gift tax problems If you can master this and understand the table very well

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

@Kodiak………The table below really helped me a lot when I was studying for REG.

When solving for problems of this nature, try to memorize this table and compare your answer side by side.

a). GIFT WHEN THE DONOR IS ALIVE

NO GAIN

Sales

(Adjusted Basis)

NO LOSS

Sales

(FMV)

b). GIFT WHEN DONOR IS DEAD (BEQUEST)

GAIN OR LOSS

Sales

(FMV)

You will be able to solve most gift tax problems If you can master this and understand the table very well

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[Kenada]

I have a question to ask the Group here.. How comfortable are you folks in Corporate Tax? I assume most of you have already gone through the material relating to Corporate Tax

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

[Kenada]

I have a question to ask the Group here.. How comfortable are you folks in Corporate Tax? I assume most of you have already gone through the material relating to Corporate Tax

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

[Author]

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