[jeff]

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Post by Another71.

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

[Mika]

@On2sum

3,000 x 2/7 x 7/8 + 10,000 x 2/5 x 1/8 =1250

Answer C

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

[Gabe]

@Mika can you explain your calc? Wouldn't you do midquarter for the total amount since over 40% was bought in Q4?

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

[On2Sum]

Yeah @Mika, That's what I came up with. I used a depreciation table though.

@Gabe, Indeed you are right. You use MQ if more than 40% of total asset placed in service during the year was don in the last 3 months.

@Gabe, by mid-quarter, it is meant each personal property(ASSET) will be treated as if they were placed in service in the middle of the quarter in which they were placed in service.

I know exactly the object of your confusion, as I too suffered the same Huh??!!

FAR - 79
REG - 76
AUD - 94
BEC - 77

DONE! DONE!! DONE!!!

"Success is not final, failure is not fatal; it is the courage to continue that counts"
-Winston Churchill

[Gabe]

Thanks @on2sum!

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

[Anonymous]

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. $19,500

b. $25,500

c. $17,000

d. $21,500

Becker says C because you add back the medical expenses, qualifying housing and residence interest, and charitable contributions. I though from the lecture that charity is not an add back for AMT. I also thought that home equity mortgage interest not used for a qualified dwelling is added back too. I am really confused with this question and would appreciate some help

[Gabe]

@cpa this was just answered in detail over here: https://www.another71.com/cpa-exam-forum/topic/reg-question-help-2

Hope this helps!

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

[Gabe]

On February 1, 2014, Pam Baker purchased an $861,000 machine (5-year property) for use in her business. Pam expensed $25,000 under Section 179 in addition to the regular depreciation of 20% in 2014 and 32% in 2015. Pam's total deductions for 2014 and 2015 for the machine are:

A.

$192,200 (2014) and $267,520 (2015).

B.

$172,200 (2014) and $267,520 (2015).

C.

$172,200 (2014) and $275,520 (2015).

D.

$192,200 (2014) and $275,520 (2015).

I chose D. Can someone explain why A is correct? The explanation shows the $25k deduction being taken for 2014 AND 2015. I thought it could only be taken for 2014

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

[Tre]

Gabe, with Section 172, you subtract out the $25,000 from the total purchase. You would use $836,000 for your depreciation calculations rather than $861,000. The first year you would add the $25,000 to your depreciation to get A.

BEC - 84
REG - 88
FAR - 75
AUD - 71, Nov 2015

[Gabe]

@Tre, so every year you would need to subtract the $25k out?

so Y1= 861-25= 836*.2= 167.2 + 25= 192.2

Y2= 861-25= 836*.32= 267.52

Y3= 861-25= 836*.33= 275.88

Correct? Note: I made up Y3 lol.

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

[Tre]

Yes, exactly. Since you already expensed the $25,000 you cannot take depreciation on that amount as well.

BEC - 84
REG - 88
FAR - 75
AUD - 71, Nov 2015

[Gabe]

Thanks @tre!

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

[Gabe]

Basis!

Mutt and Jeff each have a 50% interest in Keni Partnership. The partnership and the individuals file on a calendar-year basis. For its 2013 tax year, Keni had a $30,000 loss. Mutt's adjusted basis in the partnership interest on January 1, 2013, was $8,000. In 2014, Keni partnership had a profit of $28,000. Assuming that there were no other adjustments to Mutt's basis in the partnership in 2013 and 2014, what amount of partnership income (loss) would Mutt show on his 2013 and 2014 individual income tax returns?

A.

2013: $(8,000); 2014: $0

B.

2013: $(8,000); 2014: $7,000

C.

2013: $(15,000); 2014: $7,000

D.

2013: $(15,000); 2014: $14,000

So here is what the explanation says:

2013:

Loss <15>

Basis 8

Unallowed loss CF <7>

Taxable loss= <8> (take loss up to basis)

2014

Profit 14

Basis 0

CF= <7>

Taxable income= 7

so…in 2014 his basis disappeared? Little confused.

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

[Tre]

At the end of 2013, his basis was $0 with a disallowed loss of $7,000. He can't take that loss on his taxes but he can carry that loss for his basis. In 2014, his basis increased $14,000. We can take the $7,000 loss that was disallowed in 2013 now to offset the gains. Essentially, even though we're not allowed to have a negative basis, that's exactly what he had.

BEC - 84
REG - 88
FAR - 75
AUD - 71, Nov 2015

[Gabe]

@Tre thanks man! You're on it today! So we can CF the disallowed loss to offset future gains.

What if in 2014 we had another loss? Would we just be able to take the 7 or nothing since we had no basis technically?

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

[Tre]

Yes… We can CF the losses to offset future gains indefinitely (though the IRS may get suspicious if you aren't making money and staying in business).

BEC - 84
REG - 88
FAR - 75
AUD - 71, Nov 2015

[Author]

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