REG Study Group Q1 2015 - Page 16

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  • December 15, 2014 at 1:44 pm #651268
    Gabe
    Participant

    Recongized gain is lesser of realized gain or boot received

    so..realized gain= 50+15-40= 25

    recognized gain (boot)= 15

    $15k is recognized gain

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

    December 15, 2014 at 2:42 pm #651269
    blueberrycpa
    Member

    but the answer is $10k..

    FAR- TBD
    BEC - 75
    REG - 76
    AUD- TBD

    December 15, 2014 at 2:50 pm #651270
    Gabe
    Participant

    So..I googled and found this explanation:

    When transfer property and liabilities GREATER THAN basis for transferer, then need to realize that gain of amount in excess of basis

    A2: If this transfer qualifies under Sec. 351, the realized gain on the transfer is $10,000 ($50,000 realized – $40,000 adjusted basis). When property other than stock is received in a Sec. 351 transfer, gain is recognized to the extent of the lesser of the realized gain or the amount of other property received [Sec. 351(b)]. Hence, Mr. Brown's gain is limited to the $10,000 realized gain. If the transfer does not qualify under Sec. 351, the full gain of $10,000 would be recognized. Thus, in either case, $10,000 is the recognized gain.

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

    December 15, 2014 at 2:55 pm #651271
    blueberrycpa
    Member

    so u mean lesser of recognised gain or boot received will not be applicable here?

    FAR- TBD
    BEC - 75
    REG - 76
    AUD- TBD

    December 15, 2014 at 3:00 pm #651272
    Gabe
    Participant

    I miscalculated the realized gain

    Real= FMV (old)- AB (old)

    = 50k-40k

    = 10k

    Recognized gain

    = Lower of realized gain or boot received

    = 10k or 15k

    10k is lower.

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

    December 15, 2014 at 3:01 pm #651273
    Gabe
    Participant

    @AmorD is there a way for you to share your notes for R1-R4? I'd be interested to compare with my notes

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

    December 15, 2014 at 3:13 pm #651274
    blueberrycpa
    Member

    In 2014 albert provided services to Jims sole proprietorship in exchange for a 20% share of the newly created partnership. if the cmv of assets equal to $500k and liab equal to $100k. Albert recognises $90k as compensation income $400k*20%. Alberts basis in partnership is equal to the compensation income recognised in this case is $80k.

    My question is why is liab not adjusted when partners contributed property in exchange for basis is

    Cash contributed

    + AB of prop contributed

    + recog gain

    + share of partnership liab

    – Partners liab assumed by partnership

    Please help!

    FAR- TBD
    BEC - 75
    REG - 76
    AUD- TBD

    December 15, 2014 at 4:00 pm #651275
    Anonymous
    Inactive

    @Amor I have found your explanations extremely helpful thus far. If you find a way to share your notes with @Gabe do you mind sharing with me as well.

    December 15, 2014 at 4:02 pm #651276
    Anonymous
    Inactive

    I feel like I have a good handle on R1 and R2 since I have a pretty deep tax background. I'm skipping ahead to R5-R8 and saving R3 and R4, the topics I seem to struggle with the most for the end. Sound strategy?

    December 15, 2014 at 4:33 pm #651277
    Gabe
    Participant

    @corp I tend to go straight through…but whatever works best for you!

    Speaking of R4…does anyone have any good partnership taxation notes/links. I've googled and haven't really come up with anything. Maybe I just need more coffee ha

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

    December 15, 2014 at 6:06 pm #651278
    CPAfit
    Participant

    Hey guys! Joining the REG Q1 group for my retake in Jan. I took REG on 11/30 and failed with a 67 🙁 I used only Becker and supplemented with Ninja audio/notes/blitz. I will be adding Ninja MCQ by the end of this week to get those extra points. The good thing is that the material is still pretty fresh in my mind, so I'll use it to my advantage and get through Becker quickly.

    December 15, 2014 at 6:21 pm #651279
    Gabe
    Participant

    You got this zubairs!

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

    December 15, 2014 at 6:46 pm #651280
    blueberrycpa
    Member

    In 2014 albert provided services to Jims sole proprietorship in exchange for a 20% share of the newly created partnership. if the cmv of assets equal to $500k and liab equal to $100k. Albert recognises $90k as compensation income $400k*20%. Alberts basis in partnership is equal to the compensation income recognised in this case is $80k.

    My question is why is liab not adjusted when partners contributed property in exchange for basis is

    Cash contributed

    + AB of prop contributed

    + recog gain

    + share of partnership liab

    – Partners liab assumed by partnership

    Please help! Anyone?

    FAR- TBD
    BEC - 75
    REG - 76
    AUD- TBD

    December 15, 2014 at 8:17 pm #651281
    Anonymous
    Inactive

    sitting in my chair here cringing at these R3 and R4 questions being asked LOL

    December 15, 2014 at 9:31 pm #651282
    Anonymous
    Inactive

    I hate R3 and R4 with a passion. I went ahead and skipped to R5 and I'm trying to knock it out completely today. Hopefully I get my NTS soon so I can get an official test date nailed down.

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