[jeff]

REG Resources:

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REG Score Release: https://www.another71.com/cpa-exam-scores-results-release

[Kenada]

This is what i have in Wiley notes :-

Substantial understatement of income tax penalty applies if the understatement exceeds the greater of

1. 10% of the tax due or

2. $5,000 (10,000 for Corps)

So if A said 10% instead of 90% – A would have been correct ?

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

[Kenada]

This is what i have in Wiley notes :-

Substantial understatement of income tax penalty applies if the understatement exceeds the greater of

1. 10% of the tax due or

2. $5,000 (10,000 for Corps)

So if A said 10% instead of 90% – A would have been correct ?

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

[stokey45]

Also, I have another question,

How do you handle a section 1231 sale when it is an installment sale?

You recognize the gain right away right? But how do you recognize the payments? How much is recognized each year?

My brain feels fried. I am getting so tired from testing all day. I feel like I need/want to review more for the test tomorrow but I do not know if it will sink in. Maybe I just need to take a break.

[stokey45]

Also, I have another question,

How do you handle a section 1231 sale when it is an installment sale?

You recognize the gain right away right? But how do you recognize the payments? How much is recognized each year?

My brain feels fried. I am getting so tired from testing all day. I feel like I need/want to review more for the test tomorrow but I do not know if it will sink in. Maybe I just need to take a break.

[Kenada]

In Aug when I did the final exams I was around 60% so i knew i was not doing well.

Now that i have reviewed the material I am currently at 70 to 78. Ranges from topic to topic.. I have issues with Contracts/sales as i can't seem to tell when the question comes up which is which so i get confused.

I will do an exam session this weekend and that will tell me where i am weak and what i need to do to pick up my socks…

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

[Kenada]

In Aug when I did the final exams I was around 60% so i knew i was not doing well.

Now that i have reviewed the material I am currently at 70 to 78. Ranges from topic to topic.. I have issues with Contracts/sales as i can't seem to tell when the question comes up which is which so i get confused.

I will do an exam session this weekend and that will tell me where i am weak and what i need to do to pick up my socks…

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

[stokey45]

@insiyah

Listen to what I found. It says:

Estimated taxes — required minimum

A taxpayer is required to make estimated quarterly tax payments if both of the following conditions are met:

1. $1000.00 or more tax liability

2. Inadequate tax estimates-

The other condition is met if the taxpayer's withholding is less than the lesser of:

a. 90% of current year's tax. or

b. 100% of last year's tax

1. This applies even if an individual files a tax return with a zero tax liability in the prior year.

2. Exception: If a taxpayer had adjusted gross income in excess of $150,000. in the prior year then they should use 110%

[stokey45]

@insiyah

Listen to what I found. It says:

Estimated taxes — required minimum

A taxpayer is required to make estimated quarterly tax payments if both of the following conditions are met:

1. $1000.00 or more tax liability

2. Inadequate tax estimates-

The other condition is met if the taxpayer's withholding is less than the lesser of:

a. 90% of current year's tax. or

b. 100% of last year's tax

1. This applies even if an individual files a tax return with a zero tax liability in the prior year.

2. Exception: If a taxpayer had adjusted gross income in excess of $150,000. in the prior year then they should use 110%

[Kenada]

For Sc 1231 I may be wrong here but I was under the impression that you would spread your capital gain based on the spread of the installments you are getting from the sale of the Sc 1231 asset. I think Losses has its own rules where you can only offset a Capital gain against the capital loss.

If the asset was Ordinary income I am sure you recognize the Ordinary income when it was constructively received ? – Not Sure.

I am not good at this topic nor can I find anything about Sc 1231 and treatment of it with Installment sales…

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

[Kenada]

For Sc 1231 I may be wrong here but I was under the impression that you would spread your capital gain based on the spread of the installments you are getting from the sale of the Sc 1231 asset. I think Losses has its own rules where you can only offset a Capital gain against the capital loss.

If the asset was Ordinary income I am sure you recognize the Ordinary income when it was constructively received ? – Not Sure.

I am not good at this topic nor can I find anything about Sc 1231 and treatment of it with Installment sales…

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

[Kenada]

So because he had 0% in the prior year that's why A is wrong.

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

[Kenada]

So because he had 0% in the prior year that's why A is wrong.

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

[stokey45]

It is my understanding that the following statement is wrong because the ability to use 100% of the prior year is not lost. Keep in mind the taxpayer does not want his liability to exceed $1000.00 or he can have a penalty because of that reason.

False:

If an individual files a tax return with a zero tax liability in the prior year, the individual must pay in at least 90% of the current year's tax to avoid underpayment penalties, as the ability to use the 100% of the prior year tax is lost.

[stokey45]

It is my understanding that the following statement is wrong because the ability to use 100% of the prior year is not lost. Keep in mind the taxpayer does not want his liability to exceed $1000.00 or he can have a penalty because of that reason.

False:

If an individual files a tax return with a zero tax liability in the prior year, the individual must pay in at least 90% of the current year's tax to avoid underpayment penalties, as the ability to use the 100% of the prior year tax is lost.

[Qlad]

@ stokey/ insiyah…

this is what i know about 1231 gains…it is depreciation recapture …..in instalment sales if an item is sold for which u had taken depreciation then you recapture it and recognize gain on depreciation in the year of sale…rest amount that u receive every year is gain upto % of G/P….

Also the tax rate on depreciation gain is either the marginal rate or 25%, whichever is lower….

I did not look up my notes…so might miss something….

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

[Author]

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