REG Study Group Q1 2015 - Page 131

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  • February 21, 2015 at 9:39 pm #653002
    NJPRU
    Member

    Well.. if there was a casualty loss on a property, I wouldn't think the value of the property would go up. Thus, if it did, there wouldn't be a loss. This problem is the one that really helped me understand these type of problems:

    Pat, a single taxpayer, has adjusted gross income of $40,000 in the current year. During the year, a hurricane causes $4,100 damage to Pat's personal use car on which Pat has no insurance. Pat purchased the car for $20,000. Immediately before the hurricane, the car's fair market value was $11,000 and immediately after the hurricane its fair market value was $6,900. What amount should Pat deduct as a casualty loss for the current year after all threshold limitations are applied?

    a. $100

    b. $4,000

    c. $4,100

    d. $0

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

    IM GOING TO BE A CPA!!!!!

    February 21, 2015 at 10:23 pm #653003
    imgonnabacpa
    Member

    Hi All,

    Can someone hep me undersatnd the logic for what goes on the estate tax return, personal ITR or any other return or form?

    like a medical expense would it go on the 1040, 1041 or 706 or elsewhere. What are the rules.

    Its really confusing.

    BEC - 78
    AUD - 69,72,78
    FAR - 73, 77
    REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

    February 21, 2015 at 10:23 pm #653004
    imgonnabacpa
    Member

    Bell, a cash basis calendar year taxpayer, died on June 1 of the current year. Prior to her death, Bell incurred $2,000 in medical expenses that were paid in the current year. If the executor files the appropriate waiver, the medical expenses are deductible on:

    a.

    The estate tax return.

    b.

    The estate income tax return.

    c.

    The executor's income tax return.

    d.

    Bell's final income tax return.

    BEC - 78
    AUD - 69,72,78
    FAR - 73, 77
    REG - 74, 74, April 20(Monday). Not anymore (Fingers Crossed xxxxx)

    February 21, 2015 at 10:28 pm #653005
    BEACPA
    Participant

    NJ…

    How's it going? The answer is d. 0

    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!

    February 21, 2015 at 10:29 pm #653006
    Anonymous
    Inactive

    @NJ, D for zero casualty loss?

    We cannot claim casualty loss for personal property like automobile, correct?

    February 21, 2015 at 10:56 pm #653007
    FIFOisbetterthanLIFO
    Participant

    This one is a little tricky. Good reminder though.

    Smith and James were partners in S and J Partnership. The partnership agreement stated that all profits and losses were allocated 60% to Smith and 40% to James. The partners decided to terminate and wind up the partnership. The following was the balance sheet for S and J on the day of the windup:

    Cash $40,000

    Accounts receivable 12,000

    Property and equipment 38,000

    Total assets $90,000

    Accounts payable $24,000

    Smith, capital 30,000

    James, capital 36,000

    Total liabilities and capital $90,000

    Of the total accounts receivable, $10,000 was collected and the remainder was written off as bad debt. All liabilities of S and J were paid by the partnership. The property and equipment are sold for $32,000. Under the Uniform Partnership Act, what amount of cash was distributed to Smith?

    A. $25,200

    B. $26,000

    C. $30,000

    D. $34,800

    FAR - Passed (82)
    BEC - Passed (76)
    AUD - Passed (89)
    REG - Passed! (81)
    AICPA Ethics

    Licensed CPA

    February 21, 2015 at 10:59 pm #653008
    NJPRU
    Member

    Yes answer is 0; however, I'm not sure where you are getting that you can't take it for personal property… the rule only extends to nonbusiness property (10%, and $100).

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

    IM GOING TO BE A CPA!!!!!

    February 21, 2015 at 11:02 pm #653009
    Anonymous
    Inactive

    @NJ, I don't know where I got it either. LOL. My brain is fried.

    February 21, 2015 at 11:07 pm #653010
    NJPRU
    Member

    Damnit, you beat me to responding! You got it from the WRaP pneumonic. You can't claim losses for Wash sales, Related Party transactions, and, Personal Loss (unless they qualify for Casualty and Loss deductions)!

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

    IM GOING TO BE A CPA!!!!!

    February 21, 2015 at 11:11 pm #653011
    PasstheCPA7
    Participant

    Hi guys,

    Why is the interest on state government obligations (i.e. bonds) not taxable? I thought the only kind of bonds that are NOT taxable is the interest on Municipal bonds? Can anyone explain this?

    Thanks.

    February 21, 2015 at 11:14 pm #653012
    NJPRU
    Member

    Really need to get off of here and study the last two sections of R8.. but… to answer your question Municipal Bonds are another name for state and local obligations.

    See you guys later! Good luck!

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

    IM GOING TO BE A CPA!!!!!

    February 21, 2015 at 11:15 pm #653013
    PasstheCPA7
    Participant

    Thanks!

    February 21, 2015 at 11:24 pm #653014
    s2sylvir
    Member

    GL NJPRU!

    BEC - PASS (79)
    AUD - PASS (63, 71, 74, 74, 83)
    REG - PASS (88)
    FAR - PASS (58, 89)

    Becker for all + FAR 10 Point Combo

    February 21, 2015 at 11:35 pm #653015
    Anonymous
    Inactive

    @PasstheCPA7: the way I would like to rememebr this:

    Interest on state and local obligation– taxable

    Interest on federal obligation – taxable

    Interest on State refund- Taxable– however, the refund might not be taxable depending on if the prior year is standard deduction (filed 1040EZ) or itemized deduction

    Interest on Federal refund-taxable

    Interest on muni bond – not taxable

    Interest on US treasury bond- taxable.

    Hope this helps.

    February 21, 2015 at 11:38 pm #653016
    Anonymous
    Inactive

    Finished Business Structures lectures in R8. It doesn't seem too bad though and there a lot of crossover from BEC with Corporate Governance. But my head is killing me now so I'll look at the homework tomorrow.

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