[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Post by Another71.

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

[NJPRU]

Lauren! Twinny! How are you?

I made some really stupid mistakes on the MCQs in the first one, my score would have been around an 85% if i wasn't so damn nervous about taking it! Also, I don't plan on taking the second one. I did that mistake (taking the second one) during BEC and I lost every bit of confidence before the exam. I think if I had more time, sure.

I plan on doing MCQ Progress tests until I am blue in the face. At this point, I've rewritten my notes 3 times, and have done 3 times the MCQs. So, I plan on doing R1-R4 tonight, and adding one chapter on each night until I get to Friday and i'll just do MCQs until my eyes bleed. I took the day off so I can study most of the day and then relax at night (if I can).

What's the game plan? How are you feeling?

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

IM GOING TO BE A CPA!!!!!

[PasstheCPA7]

Hi guys,

I am doing this AMT question below, and I wanted to ask about one item “Medical Expenses.” I am not sure, but, is this a mistake in Becker? Something doesn't seem right here. The reason why I ask this is because we know Medical expenses IS an adjustment (we need to ADD IT BACK for AMT purposes). But, this question is asking about the “allowable” deductions that are not disallowed. Medical expenses should be “disallowed” and NOT allowed. Therefore, why are they adding back $2,000? Makes no sense. Can anyone explain this?

Robert had current-year adjusted gross income of $100,000 and potential itemized deductions as follows:

Medical expenses (before percentage limitations) 12,000

State income taxes 4,000

Real estate taxes 3,500

Qualified housing and residence mortgage interest 10,000

Home equity mortgage interest (used to consolidate personal debts) 4,500

Charitable contributions (cash) 5,000

What are Robert's itemized deductions for alternative minimum tax?

a. $17,000

b. $19,500

c. $25,500

d. $21,500

[lauren725]

For AMT, medical expenses are only allowed if they EXCEED 10% of AGI, so $2,000 would be an allowable deduction for AGI.

This is confusing!! Does that help?

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!

[Anonymous]

@Pass: The answer is $17,000.

Here it is asking for “allowable” itemized deduction, remember there are three items that should be allowed even for AMT purposes:

1. Medical expense (add back the part that's in excess of 10% of taxable income)

2. Housing and residence mortgage

3. charitable contribution

Except for the above three items, other itemized deduction items allowed for regular tax purposes should be add back items.

Therefore, the answer should be 2,000 medical + 10,000 + 5,000=17,000

[lauren725]

NJ, that is good though! I agree, I made two or three mistakes on mine and should have taken my time RTMFQ per usual!!!

You are killlin it! I plan on looking over R5-R8 notes and then Thursday I am off so probably will dedicate it to mostly tax and SIM review. I am pretty nervous about the SIMS just from what I have read and so I am working in the Ninja sims in to my routine and hopefully will have most of them done by Thursday. I have done about 450 ninja mcq and average is 76. I am a little all over the place!!!

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!

[NJPRU]

@Lauren – I've done all of Becker's SIMs, feeling comfortable with them. I might work in some NINJA sims on Friday just to test the waters a bit. That sounds like a good idea. If I fail (God hoping that i don't), I want to be able to use NINJA as my second source as I think I've come accustomed to Becker's questions. Hopefully that isn't the case.

You just have to keep in mind that 76 is passing. I hear that you want to be anywhere around 72-78 on NINJA. So, it looks like you are doing well! Keep up the good work, we have to push and make it to the finish line together!

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

IM GOING TO BE A CPA!!!!!

[PasstheCPA7]

@ Lauren & Coocooper – Thank you. So, basically, since for regular tax purposes, medical expenses are only allowed IF they exceed 10% of AGI. Therefore, we need to ADD-BACK that portion that exceeded AGI? Correct?

Second question is this: How about miscellaneous expenses that exceed 2% of AGI? Remember – for regular tax purpoes, miscellaneous expenses that exceeded 2% of AGI was what we could deduct. Well, for AMT, does the miscellaneous expenses work the SAME WAY as the medical expenses where we add-back the portion that exceeded AGI???

[Sandia]

@coocooper I hope this help.

It is an S corporation contribution = initial formation.

Basis is the basis from the shareholder but this case the Liability ($12M) > Base (6M). Then I will have a gain because the Liability is assumed by S corp and the shareholder contribution will be Zero. This is only when the Liability > bases.

FAR - 77 x2 Wiley book & no test bank
AUD - 83 x3 NINJA Test bank 3 time
REG - 80 x1 NINJA Test bank
BEC - 78 X2 NINJA Test bank ..done!!promesa cumplida mama -que llege al cielo 🙂
Ethic 100% Licensed VA CPA

[NJPRU]

@PASS – Just a couple of things.

1. Remember the pneumonic PANIC TIMME and you will be set. Note, that the majority of the items in TIMME are added back (as adjustments):

(T)axes

(I)nterest indebtedness

(M)edical

(M)iscellaneous Expenses subject to 2%

(E)xemptions – personal and dependent.

2. Medical and Interest Indebtedness are the two exceptions in the TIMME pneumonic that qualify for an add back and also an itemized deduction.

For interest indebtedness, it's important to note that if the interest was used to by a home it can qualify as an AMT Itemized Deduction; however, if it was used for anything else – it must be added back.

Second, like the others said above, Medical Expenses above the 10% threshold are considered an itemized dedication unless the taxpayer is more than 65 years old. At that point you need to figure two things out. The first being is what amount of money is above the 10% AGI threshold and then what amount of money is equal to 7.5% of the elderly threshold. These two numbers will then offset and the balance you have left is added back (usually) as your adjustment.

3. To answer your question about miscellaneous deductions.. any amount over the 2% AGI threshold is added back.

4. Based on what i've seen with the MCQs any itemized deduction that is not included in the TIMME pneumonic is allowable as an itemized deduction (i.e. Charitable contributions).

5. Lastly, make sure you read the question. If you are using Becker, they ask two different types of questions – one of them being what is the amount of allowable itemized deductions under AMT and the other being what is the amount of the AMT adjustment.

If you can remember the above, you're golden. I think I covered everything, anyone correct me if I'm wrong.

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

IM GOING TO BE A CPA!!!!!

[Anonymous]

@NJ: The medical expense add back for someone above 65 year ago, I think I missed this point with my study. So basically if someone (above 65) has Taxable income=100, medical expense is 15, 10% of 100=10, 7.5%=7.5 (elderly threshold), then the amount of medical expenses allowed to add back for AMT purposes would be 7.5-5=2.5?? is that how we calculate this?

[NJPRU]

@coocooper – you got it! They also go over this in detail in one of the practice exam questions and that's how they teach you to set it up. 🙂

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

IM GOING TO BE A CPA!!!!!

[Anonymous]

@NJ，awesome!! i haven't start doing my practice exams yet, i am still in the process of redo my MCQs for chapter 1-4 (half way through). I will be sitting on Friday. I think i'll work through one practice exam Wednesday and one on Thursday.

[TulaneTax]

Good luck.

FAR: Summer 2015
AUD: Summer 2015
REG: Passed
BEC: Passed

[NJPRU]

You got this coocooper! Try not to freak yourself out with the practice exams! But, seeing as you're already done with 3, you know that! Good luck!!

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

IM GOING TO BE A CPA!!!!!

[PasstheCPA7]

@NJPRU – thanks a lot! Very helpful.

[Author]

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