[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

[CPAstateOfMind]

Hope everyone is having a fun date night with REG… lol!

For anyone using the Wiley Test Bank, did anyone come across this question? I know the answer, but I feel like another option could also be the answer.

Q: The rule limiting the allowability of passive losses applies to?

Options: A – Partnership

B – S Corp

C- Personal Service Corp

D- Widely Held C Corp

I use the practice mode, and refer to the “hint” button for the tricky questions and I think that threw me off on this particular question. it says:

“The rule limiting the allowability of passive activity losses and credits does not apply to pass-through entities since passive activity income, losses, and credits from such entities flow through to be reported on the tax returns of the owners of such entities”

That hint makes me think of D (Widely Held C Corp) as the answer since A and B are pass-through entities, which makes C or D the possible choices.

Here is the Wiley explanation for why C is the answer:

“The passive activity limitations apply to individuals, estates, trusts, closely held C corporations, and personal service corporations. Application of the passive activity loss limitations to personal service corporations is intended to prevent taxpayers from sheltering personal service income by creating personal service corporations and acquiring passive activity losses at the corporate level. A personal service corporation is a corporation (1) whose principal activity is the performance of personal services and (2) such services are substantially performed by owner-employees. Since passive activity income, losses, and credits from partnerships and S corporations flow through to be reported on the tax returns of the owners of such entities, the passive activity limitations are applied at the partner and shareholder level, rather than to partnerships and S corporations themselves”

Sorry for writing a book, but I keep thinking D could also be the answer since it's not a pass-through entity, but maybe I am thinking about it in a wrong way.

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[CPAstateOfMind]

Hope everyone is having a fun date night with REG… lol!

For anyone using the Wiley Test Bank, did anyone come across this question? I know the answer, but I feel like another option could also be the answer.

Q: The rule limiting the allowability of passive losses applies to?

Options: A – Partnership

B – S Corp

C- Personal Service Corp

D- Widely Held C Corp

I use the practice mode, and refer to the “hint” button for the tricky questions and I think that threw me off on this particular question. it says:

“The rule limiting the allowability of passive activity losses and credits does not apply to pass-through entities since passive activity income, losses, and credits from such entities flow through to be reported on the tax returns of the owners of such entities”

That hint makes me think of D (Widely Held C Corp) as the answer since A and B are pass-through entities, which makes C or D the possible choices.

Here is the Wiley explanation for why C is the answer:

“The passive activity limitations apply to individuals, estates, trusts, closely held C corporations, and personal service corporations. Application of the passive activity loss limitations to personal service corporations is intended to prevent taxpayers from sheltering personal service income by creating personal service corporations and acquiring passive activity losses at the corporate level. A personal service corporation is a corporation (1) whose principal activity is the performance of personal services and (2) such services are substantially performed by owner-employees. Since passive activity income, losses, and credits from partnerships and S corporations flow through to be reported on the tax returns of the owners of such entities, the passive activity limitations are applied at the partner and shareholder level, rather than to partnerships and S corporations themselves”

Sorry for writing a book, but I keep thinking D could also be the answer since it's not a pass-through entity, but maybe I am thinking about it in a wrong way.

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[Kenada]

I would have picked C since PHC and PSC are largely with passive income and its usually Passive Income that can be offset with Passive losses.

So this statement is the reason for the limiting rule of Passive losses.

Application of the passive activity loss limitations to personal service corporations is intended to prevent taxpayers from sheltering personal service income by creating personal service corporations and acquiring passive activity losses at the corporate level.

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

[Kenada]

I would have picked C since PHC and PSC are largely with passive income and its usually Passive Income that can be offset with Passive losses.

So this statement is the reason for the limiting rule of Passive losses.

Application of the passive activity loss limitations to personal service corporations is intended to prevent taxpayers from sheltering personal service income by creating personal service corporations and acquiring passive activity losses at the corporate level.

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

[CPAstateOfMind]

@insiyah24 Thanks, I think it makes sense now. 🙂

Glad to know that I am not the only one staying up this late. haha

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[CPAstateOfMind]

@insiyah24 Thanks, I think it makes sense now. 🙂

Glad to know that I am not the only one staying up this late. haha

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[Kenada]

Yes I stay up late till 12 most nights..

This weekend I have so much to do in terms of Studying I think i will need coffee being supplied to my blood vessels directly.

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

[Kenada]

Yes I stay up late till 12 most nights..

This weekend I have so much to do in terms of Studying I think i will need coffee being supplied to my blood vessels directly.

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

[LSNYC]

I have really been slacking! Time to get back on track work should slow down sometime this week. I am studying this AM, and then tomorrow i am going to work, but hoping for half work half studying. Then this week is a power week 3 nights of full on studying, and hopefully two review nights, next weekend is going to be a power weekend!

A - 61, 91!!
B - 78!
F - 76!!!
R - 71, 73, 74, 69, 77!!!!

Finally done!

This is my 2nd attempt at the exam, I had two parts passed (failed many) and I stupidly quit, big mistake. Now I'm back and with a vengeance!

[LSNYC]

I have really been slacking! Time to get back on track work should slow down sometime this week. I am studying this AM, and then tomorrow i am going to work, but hoping for half work half studying. Then this week is a power week 3 nights of full on studying, and hopefully two review nights, next weekend is going to be a power weekend!

A - 61, 91!!
B - 78!
F - 76!!!
R - 71, 73, 74, 69, 77!!!!

Finally done!

This is my 2nd attempt at the exam, I had two parts passed (failed many) and I stupidly quit, big mistake. Now I'm back and with a vengeance!

[stokey45]

Okay — I am taking the progress tests in REG Becker Review and scoring in the 80% range. Some of it is due to the fact that a few questions are repeats and I already know the answers to them. I test in less than 1 week. I am hoping to stay in this range of performance. If nothing else it has helped to raise my confidence level! And for me that is BIG. I can get down about these exams very easily.

This is my third attempt at REG. First attempt I passed and then lost because of the 18 month rule. Then I came back in July and thought it would be easy to pass but to no avail. I did not know the information well enough. I am back studying want to finish this one up! Hoping and praying for a passing score.

Good luck to all of you studying!

[stokey45]

Okay — I am taking the progress tests in REG Becker Review and scoring in the 80% range. Some of it is due to the fact that a few questions are repeats and I already know the answers to them. I test in less than 1 week. I am hoping to stay in this range of performance. If nothing else it has helped to raise my confidence level! And for me that is BIG. I can get down about these exams very easily.

This is my third attempt at REG. First attempt I passed and then lost because of the 18 month rule. Then I came back in July and thought it would be easy to pass but to no avail. I did not know the information well enough. I am back studying want to finish this one up! Hoping and praying for a passing score.

Good luck to all of you studying!

[CPAstateOfMind]

@insiyah me too, I stay up till 12 almost everyday, but yesterday (friday) I decided to stay up later. When I wrote that post it was about 2:30am here, I forgot about the time difference between some parts of CA and TN. haha…thanks again for your help. My exam is this coming week, so it's crunch time.

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[CPAstateOfMind]

@insiyah me too, I stay up till 12 almost everyday, but yesterday (friday) I decided to stay up later. When I wrote that post it was about 2:30am here, I forgot about the time difference between some parts of CA and TN. haha…thanks again for your help. My exam is this coming week, so it's crunch time.

FAR - Passed
BEC - Passed
REG - Passed
AUD - Passed... DONE!!!

Ethics - Passed (December 2013)

[Qlad]

so i am doing progress test and looking at my notes sometimes ( many times ) to see if the answer that i thought is right ,….before selecting it….and getting around 75 to 79….feeling stressed….panicked….pls tell me how shud i improve myself….i forget the rules in 2 days if i don't progress test and come back to 50s….

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

[Author]

Replies