[jeff]

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[Anonymous]

Guys, can someone PLEASE help me understand this question:

The partnership of Bond & Felton has a fiscal year ending September 30. John Bond files his tax return on a calendar-year basis. The partnership paid Bond a guaranteed salary of $1,000 per month during the calendar year 2011 and $1,500 a month during the calendar year 2012. After deducting this salary the partnership realized ordinary income of $80,000 for the year ended September 30, 2012 and $90,000 for the year ended September 30, 2013. Bond's share of the profits is the salary paid him plus 40% of the ordinary income after deducting this salary. For 2012, Bond should report taxable income from the partnership of

a) $50,000

b) $44,000

c) $36,500

d) $48,500

[Kenada]

It is my understanding that generally, the person who receives your gift will not have to pay any federal gift tax because of it.

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

[Kenada]

It is my understanding that generally, the person who receives your gift will not have to pay any federal gift tax because of it.

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

[Anonymous]

My approach was that for 2012 Bond would report on his tax return income earned in the CALENDAR YEAR of 2012. Therefore he would report taxable income from guaranteed payments of ($1,500 x 12 months) $18,000 and income from partnership interest from 2012 fiscal year (January – September 2012 or 9 months = 80,000/12 months x 9 months = $60,000) and income from partnership interest from the 2013 fiscal year (October – December 2012 or 3 months = $90,000/12 months x 3 months = $22,500)

For a total of $18,000 + $60,000 + $22,500 = $100,500

That isn't even an option for the answer, can someone tell me where my analysis of this problem is wrong so i don't make the same mistake during the exam?

[Anonymous]

My approach was that for 2012 Bond would report on his tax return income earned in the CALENDAR YEAR of 2012. Therefore he would report taxable income from guaranteed payments of ($1,500 x 12 months) $18,000 and income from partnership interest from 2012 fiscal year (January – September 2012 or 9 months = 80,000/12 months x 9 months = $60,000) and income from partnership interest from the 2013 fiscal year (October – December 2012 or 3 months = $90,000/12 months x 3 months = $22,500)

For a total of $18,000 + $60,000 + $22,500 = $100,500

That isn't even an option for the answer, can someone tell me where my analysis of this problem is wrong so i don't make the same mistake during the exam?

[kevlee]

@cpaforeigner

it says the fiscal year ends in september so you do…

1000 x 3 = 3000

1500 x 9 = 13500

80,000 x 40% = 32000

is the answer D?

[kevlee]

@cpaforeigner

it says the fiscal year ends in september so you do…

1000 x 3 = 3000

1500 x 9 = 13500

80,000 x 40% = 32000

is the answer D?

[Kenada]

I would have picked D too. Same cal as above for the Salary.

I remember reading the Partnership income would be included in the tax return depending on the date it was distributed. So 80,000 @ 40% was distributed end of 2012, so would be part of 2012 Tax return. The 90,000 @ 40% will be included in his 2013 Tax Return.

At least that would be the logic I used to come up to answer D

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

[Kenada]

I would have picked D too. Same cal as above for the Salary.

I remember reading the Partnership income would be included in the tax return depending on the date it was distributed. So 80,000 @ 40% was distributed end of 2012, so would be part of 2012 Tax return. The 90,000 @ 40% will be included in his 2013 Tax Return.

At least that would be the logic I used to come up to answer D

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

[smsingla]

@CPAforeigner… I would say answer is a.

$15000×12=18000

$80,000×40% = 32000

total of 50,000

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

[smsingla]

@CPAforeigner… I would say answer is a.

$15000×12=18000

$80,000×40% = 32000

total of 50,000

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

[Anonymous]

@kevlee & insinyah24 both of you are correct it is answer D.

I think my hiccup in understanding is what you insinyah, even though he is calender year taxpayer he still recognizes income based on the partnership's fiscal year. This actually makes more sense of the fact that they try and limit the deferral of income like what is happening in this example.

[Anonymous]

@kevlee & insinyah24 both of you are correct it is answer D.

I think my hiccup in understanding is what you insinyah, even though he is calender year taxpayer he still recognizes income based on the partnership's fiscal year. This actually makes more sense of the fact that they try and limit the deferral of income like what is happening in this example.

[Qlad]

just wondering where can I get more practice on AMT questions…Becker has very few and feel it is not enough for practice…or is tested very lightly? any ideas?

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

[Qlad]

just wondering where can I get more practice on AMT questions…Becker has very few and feel it is not enough for practice…or is tested very lightly? any ideas?

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

[Author]

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