[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.

AUD - 79
BEC - 80
FAR - 76
REG - 92

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

[Holly]

@Gabe the beneficiary has to be under 18 or special needs when the account is opened and when making contributions; and the distributions can be made up to 30 days after the earlier of death or 30th birthday. Mr Gearty instructs to make the through high school note next to the Qualified Education Expenses (which would be considered a qualified distribution, as would college expenses).

AUD - 76
BEC - 82
FAR - 82
REG - 86

Becker & Ninja MCQ

 

 

 

BEC - 79
REG - 85
AUD - 5/27/16

[PasstheCPA7]

@ Gabe – thanks!

[Gabe]

@HR it seems you have the concept down…I guess I am confused as to what your question is? Or can anyone else help HR?

saw this in a SIM, wanted to know if anyone knew the IRC section that backs it up:

Before his death in 2014, Randy, a US citizen, made a gift of stock valued at $29,000 (basis to Randy was $15,000) to his sister that he had owned for three years.

Q: What basis does Randy's sister have in the stock she received as a gift?

A: $15k- The gain and loss basis of property received as a gift is the adjusted basis of the donor if this amount is less than the fair market value.

I always used FMV.

CPA, CFE
CISA- Experience will be completed by August 2016

[Kate]

Thought I'd join the study group. REG will be my second CPA exam. Scheduled for the beginning of April. Today I begin studying! Hello everyone!

AUD (2/3/2015) Pass
REG (4/24/2015) Pass
FAR (8/3/2015) Pass
BEC (10/25/2015) Pass

[Holly]

@Gabe 1015

AUD - 76
BEC - 82
FAR - 82
REG - 86

Becker & Ninja MCQ

 

 

 

BEC - 79
REG - 85
AUD - 5/27/16

[Gabe]

Hello Kate! Welcome to REG! Great AUD score!

CPA, CFE
CISA- Experience will be completed by August 2016

[Gabe]

Thanks HR! So normally we use the basis of the donor, unless FMV is lower, then use the FMV.

Just thinking out loud…so if the IRS wants us to use the lower base, this would cause a larger gain if we sold the gifted property, which would, in turn, be more taxes for them. Yeah?

CPA, CFE
CISA- Experience will be completed by August 2016

[PasstheCPA7]

Hi guys,

I came across this IMPORTANT distinction while studying Like-Kind Exchanges. When we have Like-Kind Exchanges and we want to calculate “Boot received” – we need to take into account the “Net reduction in mortgage liabilities”. SO, if I was contributing Building A that had a mortgage of $30,000 and I was getting Building B that had a mortgage of $10,000 – I NEED to add $20,000 to my Boot received?

However, if we are talking about Shareholder Contribution in a C-Corp, we DON'T add net reduction in mortgage for Boot Received (when talking about a Shareholder Contribution in a C-Corp). Why is this?

Important difference. Why do we have this difference in treatment? Anyone want to explain??

[Anonymous]

@Gabe well its a smaller gift if your using the lowest base so it could maybe save you gift tax. But yea, if you have a low basis and a high FMV that will cause the person you are giving it to to have higher tax liability but LTCG property has favorable tax rates so its really not too bad. im sure the person is still very happy to get the property.

now, if the property you are gifting has an FMV is lower then the basis I forget exactly what happens. I think their basis becomes FMV so neither party gets to take a loss unless the person held onto it and it lost even more value

[Anonymous]

@PasstheCPA7 I am not sure if i completely understand your question, but yes, debt is boot and if you transfer property to someone and they take the debt then that is debt relief to you and you would have gain so yes, you would add the 20,000

If you are contributing property to a corporation and its a controlled corporation then the liabilities such as a mortgage are treated as boot only for determining the basis of the stock received (the gain will be deferred until the stock is sold because the debt lowers basis).

If it is just a normal contribution to corporation, the debt relief would be recognized for tax purposes right then and there and it would be added

[PasstheCPA7]

@ cprv, thanks!

[PasstheCPA7]

Hi guys,

I wanted to ask a question on Section 291. Section 291 is the depreciation recapture for Corporations. Becker talks about this a little bit, but, is this one area that we could be heavily tested on? I know Section 1231, 1245, and Section 1250 are. But – how about Section 291 (for Corporations)? I didn't see any homework questions on this and there are no simulations on Section 291. So, I don't know what to think at this point.

Thanks.

[Gabe]

Thanks for the explanation @cp I appreciate it. When do you sit?

@Pass- I think it's safe to say if there are no questions and no simulations it's probably not heavily tested. Focus on 1231, 1245, and 1250.

CPA, CFE
CISA- Experience will be completed by August 2016

[Holly]

ALL – I contacted Becker about my Coverdell question where Gearty notes that qualified educational expenses=through high school. Per Becker, they're not sure why he made that note. It's on page R2-9 and needs to be erased.

AUD - 76
BEC - 82
FAR - 82
REG - 86

Becker & Ninja MCQ

 

 

 

BEC - 79
REG - 85
AUD - 5/27/16

[Gabe]

@HR thanks!

CPA, CFE
CISA- Experience will be completed by August 2016

[Author]

Replies