REG Study Group Q1 2015 - Page 32

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  • January 2, 2015 at 8:41 pm #651510
    terryharm
    Member

    @gabe that's what I thought just wanted to be sure… I wonder if anyone took the exam today? I didn't see anything on the Reg experience chat..

    1 more day of studying Sunday a.m.,, then I am free for a month until the grades come out, looks like 2/4/15…

    ok back to the books..

    BEC: 81
    FAR: 75
    AUD: 81
    REG: 85

    PA license Pending..

    January 2, 2015 at 9:04 pm #651511
    Gabe
    Participant

    I was wondering the same thing @terry. Good luck tomorrow!!

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

    January 2, 2015 at 9:15 pm #651512
    terryharm
    Member

    Sunday.. I still have one more day to wrap this up…

    BEC: 81
    FAR: 75
    AUD: 81
    REG: 85

    PA license Pending..

    January 2, 2015 at 9:15 pm #651513
    terryharm
    Member

    Wait today is Friday right.. lol I am losing track of time

    BEC: 81
    FAR: 75
    AUD: 81
    REG: 85

    PA license Pending..

    January 2, 2015 at 9:19 pm #651514
    Gabe
    Participant

    Nope, I am losing track of time hehe…I had yesterday off of work so I am all mixed up. Good luck on Sunday!

    Anyone explain this?

    Fairly straight forward:

    While preparing a partnership tax return, the accountant discovered that ABC Partnership distributed property to Anne, a partner, in a nonliquidating transfer. No money was distributed to Anne during the year, the property was in the partnership for over five years, and no debt was attached to the property. Anne had a basis in her partnership interest of $10,000. The partnership had an adjusted basis of $20,000 in the property distributed to Anne. Which of the following are the tax consequences to Anne?

    A.

    $0 gain, basis in the partnership is reduced to $0, and basis in the property received is $10,000

    B.

    $0 gain, basis in the partnership is reduced to $0, and basis in the property received is $20,000

    C.

    $10,000 gain, basis in the partnership is reduced to $0, and basis in the property received is $20,000

    D.

    $10,000 gain, basis in the partnership is unchanged, and basis in the property received is $20,000

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

    January 2, 2015 at 9:38 pm #651515
    terryharm
    Member

    ok let me give it a shot. partnership – non-liquidating.

    Anne's Basis is 10,000 Partnership basis is $20,000

    anne's basis can not drop below 0, so the land is given to her and her basis is 10

    so answer is no gain, basis drops to 0, and her basis is 10

    correct?

    BEC: 81
    FAR: 75
    AUD: 81
    REG: 85

    PA license Pending..

    January 2, 2015 at 9:43 pm #651516
    Anonymous
    Inactive

    Hi all,

    My question is from Becker on C-Corps.

    Aztec, a C corporation, distributed an asset to Burn, a shareholder. The asset had a fair market value of $30,000 and was subject to a $40,000 liability, assumed by Burn. The asset had an adjusted basis of $25,000. What amount of gain must Aztec recognize?

    When a corporation distributes assets to a shareholder, the corporation recognizes a gain as if it had sold the asset. The gain is calculated as follows:

    Amount realized – greater of FMV of asset = $30,000 or the amount of liability assumed by the shareholder

    $ 40,000

    Less: Adjusted basis of property sold

    (25,000)

    Realized and recognized gain

    $ 15,000 (Answer)

    My question is: Why isn't the answer $5,000? I thought that the calc is: FMV of property (30,000) – NBV (25,000) = 5,000 Corp Gain. How does the liability play in?

    January 2, 2015 at 9:58 pm #651517
    blueberrycpa
    Member

    Ninjas

    Just to confirm 2014 rules still apply for Jan 2015 testing window right?

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

    January 2, 2015 at 9:59 pm #651518
    Gabe
    Participant

    @terry yep! so it would be

    A's basis 10

    less Land <10>

    = G/L -0-

    Right?

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

    January 2, 2015 at 10:00 pm #651519
    The_AmYam
    Member

    See the “amount realized” line above: You must take the greater of the FMV or the amount of liability assumed.

    In this case, the 40k liability assumed is > 30k FMV, so you must use the 40k.

    REG - 81
    FAR - 79
    AUD - 94
    BEC - OCT 15

    January 2, 2015 at 10:01 pm #651520
    Gabe
    Participant

    @cpa the liability assumed is treated like cash received since it increases the partner's basis. The answer states, take the greater of FMV or liability assumed. 40>30

    So

    40

    <25>

    = 15

    @kickass yes

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

    January 2, 2015 at 10:02 pm #651521
    The_AmYam
    Member

    Think of it this way: The government wants the most money they can get. 😉

    REG - 81
    FAR - 79
    AUD - 94
    BEC - OCT 15

    January 2, 2015 at 10:06 pm #651522
    terryharm
    Member

    @gabe I would go with the Gen Rule is no /gain or loss unless there is boot, it not a liquidating distribution and its a partnership not a corp, those are the things I have been looking for when answering.

    BEC: 81
    FAR: 75
    AUD: 81
    REG: 85

    PA license Pending..

    January 3, 2015 at 5:11 am #651523
    blueberrycpa
    Member

    A CPA assists a taxpayer in tax planning regarding a transaction that meets the definition of a tax shelter as defined in the Internal Revenue Code. Under the AICPA Statements on Standards for Tax Services (SSTS), the CPA should inform the taxpayer of the penalty risks unless the transaction, at the minimum, meets which of the following standards for being sustained if challenged?

    A.

    More likely than not

    B.

    Not frivolous

    C.

    Realistic possibility

    D.

    Substantial authority

    Ninja answer A … Gleim answer C

    Anyone pls?

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

    January 3, 2015 at 1:47 pm #651524
    Taherkq
    Member

    @kickass in Becker the answer is also A and in ninja too. so i would go with that as the correct answer.

    FAR- 80
    BEC- 81
    REG- 85
    AUD- 77

    Done!!!!

    (Becker)

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