REG Study Group Q1 2015 - Page 132

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  • February 21, 2015 at 11:39 pm #653017
    FIFOisbetterthanLIFO
    Participant

    Scoring around 80% on the multiple choice. Just worried about the SIMs!! Seems like it takes 7 of the 15 mins per SIM just to figure out what they are asking for…

    Anyone who taken REG that has any advice on how to approach the REG SIMs?

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

    Licensed CPA

    February 21, 2015 at 11:53 pm #653018
    PasstheCPA7
    Participant

    @ coocooper,

    The interest on state and local obligation is not taxable. I think that's where you had a mistake. State and local obligation is a municipal bond, and thus, both are non-taxable.

    February 22, 2015 at 12:14 am #653019
    PasstheCPA7
    Participant

    Hey guys – quick question on this question I came across.

    What would be the journal entry for this accrual transaction? A repair completed prior to year end but not invoiced.

    February 22, 2015 at 12:15 am #653020
    PasstheCPA7
    Participant

    The repairing company would credit “Unearned Liability” because it hasn't invoiced it. But – what would be the debit? What would the repairing company debit?

    February 22, 2015 at 12:24 am #653021
    NJPRU
    Member

    ahhhh back already since I hate employer employee law.

    Pass I would do the following: DR: Accrued Income (CR): Revenue.

    You already completed your end, so it's no longer a liability but it can't sit in AR because you haven't billed them yet, therefore, it's an asset on your books as an accrued income until you bill and they pay. I would say once you bill, it would be DR: AR and (CR) Accrued Income.

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

    IM GOING TO BE A CPA!!!!!

    February 22, 2015 at 12:29 am #653022
    FIFOisbetterthanLIFO
    Participant

    Pass, it would be as follow if you are the company booking the expense:

    Debit Repair & Maintenance Expense

    Credit Accrued liability

    When the bill is received:

    Debit Accrued Liability

    Credit Cash/accounts payable

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

    Licensed CPA

    February 22, 2015 at 12:35 am #653023
    Anonymous
    Inactive

    Gift taxes paid on gifts made after 1976 are a credit against the gross estate tax. Are the previously paid gift taxes like non-refundable/refundable tax credits?

    February 22, 2015 at 12:39 am #653024
    Anonymous
    Inactive

    I don't get this, what's the difference between 1 and 2?

    Mike, an employee of a large corporation, typically works at corporate headquarters. Mike is assigned to work temporarily at a site away from corporate headquarters for a period of two months. In determining his deduction for transportation expenses, which of the following statements is correct?

    A. Mike may only deduct transportation expenses incurred in traveling from his personal residence to the temporary work site if the work site is outside of his metropolitan area.

    B. Mike may only deduct transportation expenses incurred in traveling from his personal residence to the temporary work site if the work site is inside of his metropolitan area.

    Correct C. Mike may deduct transportation expenses incurred in traveling from his personal residence to the temporary work site regardless of the distance.

    D. Mike may only deduct transportation expenses incurred in traveling from his personal residence to the temporary work site if his residence qualifies for the home-office deduction.

    In general, daily transportation expenses incurred in going between a taxpayer's residence and a work location are considered to be nondeductible commuting expenses.

    However, there are three sets of circumstances in which daily transportation expenses are considered deductible under the Internal Revenue Code:

    1. A taxpayer may deduct daily transportation expenses incurred in going between his or her residence and a temporary work location outside the metropolitan area where the taxpayer lives and normally works.

    2. If a taxpayer has one or more regular work locations away from his or her residence, the taxpayer may deduct daily transportation expenses incurred in going between the residence and a temporary work location in the same trade or business, regardless of the distance.

    3. If a taxpayer's residence is his or her principal place of business for purposes of IRC Section 280A(c)(1)(A) (i.e., he or she qualifies for the home-office deduction), the taxpayer may deduct daily transportation expenses incurred in going between the residence and another work location in the same trade or business, regardless of whether the other work location is regular or temporary and regardless of the distance.

    Thus, for Mike's situation, the temporary work site need not be outside the metropolitan area in which Mike lives in order for him to have a deductible expense.

    February 22, 2015 at 12:45 am #653025
    Anonymous
    Inactive

    @pass: oh sorry, i mistyped, nice catch though, thank you.

    February 22, 2015 at 12:47 am #653026
    NJPRU
    Member

    @FIFO, lol. Depends on the context and how you read it I guess.

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

    IM GOING TO BE A CPA!!!!!

    February 22, 2015 at 1:34 am #653027
    Anonymous
    Inactive

    QUESTION #1

    Gift taxes paid on gifts made after 1976 are a credit against the gross estate tax.

    Are the previously paid gift taxes treated like non-refundable/refundable tax credits?

    QUESTION #2

    Section 179 deduction (based on partner's share) is part of Schedule K-1?

    February 22, 2015 at 2:15 am #653028
    lauren725
    Member

    Amor – I don't think you will see a question that asks about the law before 1976. That is probably out of the scope of what they will ask??

    Yes, Section 179 will show up on the partner's K-1.

    https://www.irs.gov/pub/irs-pdf/f1065sk1.pdf

    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!

    February 22, 2015 at 2:30 am #653029
    Anonymous
    Inactive

    Thanks Lauren!

    February 22, 2015 at 3:35 am #653030
    Anonymous
    Inactive

    John and Mary were divorced last year. The divorce decree provides that John pay alimony of $10,000 per year, to be reduced by 20% on their child's 18th birthday. During the current year, John paid $7,000 directly to Mary and $3,000 to Spring College for Mary's tuition. What amount of these payments should be reported as income in Mary's current year income tax return?

    Alimony would be income to Mary while child support would not. Funds qualify as child support only if 1) a specific amount is fixed or is contingent on the child's status (e.g., reaching a certain age), 2) it is paid solely for the support of minor children, and 3) it is payable by decree, instrument or agreement. The actual use of the funds is irrelevant to the issue. In this case, $2,000 (20% × $10,000) qualifies as child support. The other $8,000 is alimony, which would be income to Mary.

    Can someone please tell me how do you tell 20% qualifies as child support? It doesn't say this in the question right? It only says the amount will go down by 20% when the child turns 18..

    Thanks!

    February 22, 2015 at 3:54 am #653031
    lauren725
    Member

    I think the fact that it states “the amount will go down once the child turns 18” IMPLIES that that amount is what qualifies as child support. The wording is tricky, I had trouble with this one too. Just remember when it says it will go down by X amount when child turns 18, you then know that is the amount that is currently paid for child support.

    Does that help at all?

    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!

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