[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]

I just read this in Becker too. It's more likely than not.

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

IM GOING TO BE A CPA!!!!!

[Anonymous]

hey guys

so i started R1, and i am confused about Social Security. what is considered a low income level in order for it to be nontaxable.

Also, series EE bonds….one of the sims states that the interest of $650 from US ee savings bonds would all be included on the individual income tax return. I thought that it was tax exempt?

[terryharm]

EE bonds only tax exempt if purchased after 1989 and used for Educational purposes.

low income under $15k,

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

PA license Pending..

[Mika]

Example one

The couple received a tax refund for overpayment of their prior year’s income taxes: $2,500 from the IRS and $1,250 from the state revenue department. The couple’s AGI was $80,000 in the prior year and was not subject to any AMT. The couple itemized last year because their itemized deductions exceeded the standard deduction by $950.

Answer: Tax refund amount is 950.

The couple is required to report only $950 of the state income tax refund. This amount equals the excess itemized deductions (total itemized deductions minus the standard deduction amount) that they claimed on the prior tax return.

Example Two

Robbe, a cash-basis single taxpayer, reported $50,000 of adjusted gross income last year and claimed itemized deductions of $5,500, consisting solely of $5,500 of state income taxes paid last year. Robbe's itemized deduction amount, which exceeded the standard deduction available to single taxpayers for last year by $1,150, was fully deductible and it was not subject to any limitations or phaseouts. In the current year, Robbe received a $1,500 state tax refund relating to the prior year. What is the proper treatment of the state tax refund?

Answer: Include $1,150 in income in the current year

—

Question

Why example one need to capture the differences while example two do not?

REG - 80 (02/13/2015) Roger + Ninja Flash Card + Ninja MCQ + Becker's Note
FAR - 84 (05/29/2015) Roger + Ninja MCQ + Some Wiley book questions
BEC - 77 (08/27/2015) Roger + Ninja MCQ + Half Wiley book questions
AUD - 87 (08/28/2015) Roger + Ninja MCQ + Half Wiley book questions

[funtimesNOT]

Should I study AMT….

AUDIT - 79
FAR - 64, 77
BEC - 69, 71,79 - DONE!
REG - 60, 75

Nothing in the 80s ; however, I worked full time the whole time! (like 10 hour days) so it can be done 🙂

[Gabe]

@fun yes

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

[funtimesNOT]

no

AUDIT - 79
FAR - 64, 77
BEC - 69, 71,79 - DONE!
REG - 60, 75

Nothing in the 80s ; however, I worked full time the whole time! (like 10 hour days) so it can be done 🙂

[leglock]

@Mika:

To understand these 2 example please note the following 2 things:

1.Recall that your Federal taxes are not deductible. So even if you itemize, federal taxes are not included as something you took as a deduction. (This is important to note because the problem tries to trick you into including the fed refund as income the following year, but you never took it as a deduction)

2.Also note there is something called the tax benefit rule which recognizes that everyone is entitlied to a standard deduction and if you itemize an amount in excess of the standard deduction, the added benefit you rec'd by itemizing is really only the amount above the standard deduction, not the entire itemized amount, because everyone is entitled to a standard deduction. It is this concept these problems are getting at.

In example 1, your itemized deductions (of which federal is never included, trick in the problem) exceeded the standard deduction by 950. So the benefit of itemizing was really only 950. You rec'd a refund of 1250, but 950 was your benefit, so you pick up only 950 in income. The IRS is being nice to taxpayers

In example 2, he itemized 5500 and his itemization was solely attributable to state income taxes (not federal, so they were actually deducted). His itemized exceeded the standard by 1150. So, the additional benefit he received by itemizing was 1150 not 5500. He received a 1500 refund, but the benefit of itemzing was only 1150, so he only has to pick up 1150 of income. This is one of the many ways the IRS is nice to taxpayers.

[Gabe]

so @terry- gen rule= G/L if there is:

boot

nonliquidating distribution

partnership

Correct?

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

[Gabe]

Lind and Post organized Ace Corp., which issued voting common stock with a fair market value of $120,000. They each transferred property in exchange for stock as follows:

Adjusted Fair Market Percentage of

Property Basis Value Ace Stock Acquired

---

---

---

---

Lind Building $40,000 $82,000 60%

Post Land 5,000 48,000 40%

The building was subject to a $10,000 mortgage that was assumed by Ace.

What was Lind’s basis in Ace stock?

A.

$82,000

B.

$40,000

C.

$30,000

D.

$0

Correct answer is C…My question is why isn't the basis reduced by the % of ACE acquired by Linds? So, wouldn't it be

$40k

<$6k> (liability assumed by Lind)

= $34k

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

[Taherkq]

@Gabe, because this is a corporation not a partnership, the 34k basis would apply if it was a partnership.

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

Done!!!!

(Becker)

[Gabe]

Thanks @taher!

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

[lauren725]

In the absence of an election to adopt an annual accounting period, the required tax year for a partnership is:

A. A tax year of one or more partners with a more than 50% interest in profits and capital

B. A tax year that results in the greatest aggregate deferral of income

C. A tax year of a principal partner having a 10% or greater interest

D. A calendar year

The answer is A. However, all I see in becker with partnerships talks about how the calendar year should be used. The logic of this answer makes sense but I was wondering if anyone had a page reference in the material that talks about this? I am not seeing it , but maybe I am missing it. thanks!!

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!

[terryharm]

OMG, I just took a Wiley practice exam, it was all Bus Law, UCC, nothing on indiv. corpor/partnerships… I don't remember that many questions on Bus Law, UCC etc…. I only got 50 correct. that's a 67 doing SIMS now, I guess if you calculated 1 pt per question, I need to get 25 right onthe SIMS… to pass….

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

PA license Pending..

[terryharm]

It is what it is at this point. I have done everything they recommended, Re did all lectures in Becker, all questions in becker, did the mcq in ninja 2014 and 2015, did sims in Gleim, re read notes, and did mcqs till my eye are falling out. So If I miss this by a point or two, someone needs to tell me what i am missing. I do have to say I am drawing a blank when I read the law questions. So maybe after dinner I might try some questions and I will re-read those notes before the exam tomorrow morning, must but be all the exemptions and other formulas i put in my brain in the last week.

I will let you know what I came across tomorrow. Thanks for your help and support this last few days, Keep studying hard the end is almost near for many of us.

Going to get Dinner, take a break, and get a good nights sleep.

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

PA license Pending..

[Author]

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