[jeff]

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Post by Another71.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[Anonymous]

In order for an unlimited marital deduction to apply to the estate tax, all of the following must apply:

•The decedent must be married and survived by their spouse.

•The spouse must be a U.S. citizen.

•The property must be included in the decedent's gross estate and pass to the surviving spouse.

•The spouse's interest in the property must not be a terminable interest.

Guys, what is meant by:

•The spouse's interest in the property must not be a terminable interest.????

[Anonymous]

I found the legal definition of terminable interest.

“A gift tax marital deduction does not apply to a transfer of a terminable interest in property. A terminable interest is one that will terminate on a lapse of time or on the occurrence, or failure to occur, of a contingency.”

Can anyone explain this in layman's terms? Thanks again.

[NJPRU]

Sorry Amor – just starting to study that section now… it's gonna take a lot of work as I don't remember nearly as much as I should.

Thanks for all of your help with everything guys! I appreciate it.

As for depreciation, I have a silly equation to memorize 3, 5, and 7 but I wouldn't have a clue how to memorize 10, 15, and 20.

H + C/E + F = 3, 5, and 7 and all of those are double declining HY and MQ (edit: 10 is also 200%), whereas 15 and 20 are 150% and HY and MQ.

H = horses, C/E = cars (autos) and office equipment, and F = office furniture.

For whatever reason, it just stuck. lol

As for 1245, i understand the 1245 rules now I think… 1250 is another story.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[Anonymous]

@NJPRU, I only have sewer pipes for 20 years remembered. But for 10 years, I did not read any property classified under that period. Do you know some?

I am lost with a question stating double declining balance used then would mention about straight-line. I know we use 150% for farming depreciation.

[NJPRU]

Here's a list from the IRS website…

3-year property.

Tractor units for over-the-road use.

Any race horse over 2 years old when placed in service. (All race horses placed in service after December 31, 2008, and before January 1, 2014, are deemed to be 3-year property, regardless of age.)

Any other horse (other than a race horse) over 12 years old when placed in service.

Qualified rent-to-own property (defined later).

5-year property.

Automobiles, taxis, buses, and trucks.

Computers and peripheral equipment.

Office machinery (such as typewriters, calculators, and copiers).

Any property used in research and experimentation.

Breeding cattle and dairy cattle.

Appliances, carpets, furniture, etc., used in a residential rental real estate activity.

Certain geothermal, solar, and wind energy property.

7-year property.

Office furniture and fixtures (such as desks, files, and safes).

Agricultural machinery and equipment.

Any property that does not have a class life and has not been designated by law as being in any other class.

Certain motorsports entertainment complex property (defined later) placed in service before January 1, 2014.

Any natural gas gathering line placed in service after April 11, 2005. See Natural gas gathering line and electric transmission property , later.

10-year property.

Vessels, barges, tugs, and similar water transportation equipment.

Any single purpose agricultural or horticultural structure.

Any tree or vine bearing fruits or nuts.

Qualified small electric meter and qualified smart electric grid system (defined later) placed in service on or after October 3, 2008.

15-year property.

Certain improvements made directly to land or added to it (such as shrubbery, fences, roads, sidewalks, and bridges).

Any retail motor fuels outlet (defined later), such as a convenience store.

Any municipal wastewater treatment plant.

Any qualified leasehold improvement property (defined later) placed in service before January 1, 2014.

Any qualified restaurant property (defined later) placed in service before January 1, 2014.

Initial clearing and grading land improvements for gas utility property.

Electric transmission property (that is section 1245 property) used in the transmission at 69 or more kilovolts of electricity placed in service after April 11, 2005. See Natural gas gathering line and electric transmission property , later.

Any natural gas distribution line placed in service after April 11, 2005 and before January 1, 2011.

Any qualified retail improvement property placed in service before January 1, 2014.

20-year property.

Farm buildings (other than single purpose agricultural or horticultural structures).

Municipal sewers not classified as 25-year property.

Initial clearing and grading land improvements for electric utility transmission and distribution plants.

25-year property. This class is water utility property, which is either of the following.

Property that is an integral part of the gathering, treatment, or commercial distribution of water, and that, without regard to this provision, would be 20-year property.

Municipal sewers other than property placed in service under a binding contract in effect at all times since June 9, 1996.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[lab2008]

In Becker's text, it says under the UCC, when there is a breach, the seller may recover the full sales price only if the product is specially made or cannot be sold at all….In Wiley, it says the seller may recover the full price if it can't be sold for a reasonable price.

Thoughts?

3 out of 4 passed and sitting for FAR on May 31. Will lose credit for Audit if I don't pass FAR by Aug 4. I love leases and bonds.

[NJPRU]

@lab – this is from the UCC itself:

2-708. Seller's Damages for Non-acceptance or Repudiation.

(1) Subject to subsection (2) and to the provisions of this Article with respect to proof of market price (Section 2-723), the measure of damages for non-acceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this Article (Section 2-710), but less expenses saved in consequence of the buyer's breach.

(2) If the measure of damages provided in subsection (1) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this Article (Section 2-710), due allowance for costs reasonably incurred and due credit for payments or proceeds of resale.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[BEACPA]

Dole, the sole owner of Enson Corp., transferred a building to Enson. The building had an adjusted tax basis of $35,000 and a fair market value of $100,000. In exchange for the building, Dole received $40,000 cash and Enson common stock with a fair market value of $60,000. What amount of gain did Dole recognize?

a.

$5,000

b.

$40,000

c.

$0

d.

$65,000

FAR - 2/28/14 PASS Praise be to God!
AUD - 7/5/14 PASS Praise be to God!
BEC - 11/29/14PASS Praise be to God!
REG - 2/28/14 PASS Praise be to God!

[NJPRU]

answer should be b. 40,000 which is the lesser of the gain realized (65,000) and boot received 40k.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[Anonymous]

Yes. B

[Anonymous]

In January 2002, Brown sold land he had owned for many years on the installment basis. Installments are to be made semi-annually on the first day of March and September. $30,000 of each installment represents Brown's profit. Brown is in the 33% bracket for 2014. How much capital gains tax must Brown pay on the two installments he receives in 2014?

Correct A.

$9,000

B.

$12,000

C.

$19,800

D.

$21,000

Since both of the installments were received after May 5, 2004, and the property sold was held more than 12 months, both installments are taxed at the 15% capital gains rate. Thus, the capital gains tax is $9,000 ($60,000 × 0.15).

The current capital gains rates apply to installment sale proceeds collected after the effective date of the current rates (after May 5, 2004), even if the installment sale occurred before the effective date of the current rates.

The way the answer was explained doesn't make sense to me at all. What am I missing here?

[NJPRU]

Amor – not that I'm memorizing this at all, but this is a long term capital gain.. as it was held for many years (appears to be capital since it wasn't used in trade or business). If you go to page R4-27, tax on all long term capital gains for percentages 25-35% is taxed at 15%. Thus, you would multiple the 60,000 profit by the 15%, arriving at your capital gains tax of 9,000.

AUD: DONE
FAR: DONE
BEC: DONE
REG: DONE

IM GOING TO BE A CPA!!!!!

[Anonymous]

Thanks NJ. We really need to memorize even those miniature rates like that. According to my notes, 15% is used for:

1) LT-Net Capital Gain (low/average earners)

2) Depletion rate for copper, gold, silver, iron, and oil and gas;

3) Dividend tax rate/Qualified dividends for most TPs

[lauren725]

Hope everyone is doing good. That corp question asked on the previous page confused me, ugh I feel like I am forgetting things just a few days after look at them…

I am up to commercial paper (R7) on my review but am spending most of the evening working on R4 SIMS. Some of these are making my brain spin…3/2 stock splits, etc. I am starting to get really nervous about this 🙁

AUD - 73,91
FAR - 79 - Thank you God!
BEC - 73,79!!!!
REG - 92 whatttt??!

I used Becker review + flashcards, Ninja Audio, Ninja MCQ supplement on BEC and REG.

Done! Praise God!

[thelonewolf527]

Does anyone have like a comprehensive list of Adjustments to, Deductions for, and Deductions from AGI?

AUD - 08/04/14 - 83
FAR - 11/29/14 - 80
REG - 02/26/15 - 89
BEC - 05/30/15 - 86

DONE!

[Author]

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