[jeff]

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Post by Another71.

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

[Gabe]

Farr, an unmarried taxpayer, had $70,000 of adjusted gross income and the following deductions for regular income tax purposes:

Home mortgage interest on a loan to acquire a principal residence $ 11,000

Miscellaneous itemized deductions above the threshold limitation 2,000

What are Farr's total allowable itemized deductions for computing alternative minimum taxable income?

a.

$11,000

b.

$13,000

c.

$0

d.

$2,000

If the Misc itemized deductions were described as “greater than 2% threshold” would they be allowed for itemized deductions?

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

[Gabe]

@step I take it on the 20th so I have one more weekend, technically

– today going over R3/R4

– next week do as many MCQs as possible- focus on corp taxes

– usually the day before I'll read AICPA questions

– listen to audio all week 🙂

good luck!

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

[step73121]

@gabe thanks, you too!

REG (1/16/15): 82
FAR (5/28/15): 78
AUD (8/20/15): 85
BEC (10/8/15): 82

[The_AmYam]

I did practice exams this morning and completely torpedoed (??) any confidence I had yesterday… sooooo based on today, I'm hitting E+P hard. I'm going to drill on corporate related stuff – I just can't get it to stick! It's really starting to piss me off. something about the FMV basis is throwing me.

I will probably do a lot of sims tonight/tomorrow. Review flash cards. MCQ here or there.

gabe I haven't forgotten a/b the individual AMT questions, I've just been focused elsewhere.

I feel like an a-hole, today is my husband's actual birthday and I completely forgot this morning, just started talking his head off about the exam as soon as I got up. happy birthday to him! :/

at this point, I feel like I know enough to fail, if that makes sense. like if there is a calculation and you have to add 9 things, I will get 8 of them correct and not include the 1 and then get it wrong. that's my concern right now. all the stupid little $***.

I'm so over this!

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

[The_AmYam]

For anyone doing Wiley Corp sims – in sim TBSRWO0023 Distribution … where in the world does Underwood come into the picture? there's no reference to this shareholder in the original problem facts. I have all 18 sims pulled up and there's no related sim that provides the facts necessary to calculate the entire second half of the sim.

I guess it doesn't matter but it sure is annoying.

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

[The_AmYam]

For 2014, Robert had 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 that are allowable for alternative minimum tax purposes?

a) 17,000

b)19,500

c) 21,500

d)25,500

A)

For purposes of computing an individual’s AMT, no deduction is allowed for personal, state, and local taxes, and home mortgage interest if the loan proceeds were not used to buy, build, or substantially improve the home. Additionally, unreimbursed medical expenses are allowed only to the extent in excess of 10% of adjusted gross income. Here, Robert’s allowable itemized deductions for AMT purposes consist of medical expenses of $12,000 − (10% × $100,000) = $2,000, qualified mortgage interest of $10,000, and charitable contributions of $5,000, resulting in a total of $17,000.

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

[The_AmYam]

When determining his federal income tax, Curt had the following items for 2014:

Personal exemption $3,950

Itemized deduction for personal property taxes 2,500

Charitable contribution of capital gain property 1,500

Net long-term capital gain 1,000

Excess of MACRS depreciation on personal property over depreciation computed using the 150% declining-balance method 600

Tax-exempt interest from City of Chicago general obligation bonds 400

What is the total amount of adjustments to taxable income for purposes of computing Curt’s alternative minimum tax for 2014?

A) 3,100

B)7,050

C) 7,200

D) 7,800

B

Curt’s adjustments consist of the $600 of excess depreciation, the $3,950 personal exemption and the personal property taxes of $2,500, a total of $7,050.

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

[The_AmYam]

In 2014, Joe Buron, a single taxpayer, had $80,000 in taxable income before personal exemptions. Buron had no tax preferences, and his itemized deductions were as follows:

Real property taxes $4,000

Home mortgage interest on loan to purchase residence 6,000

Miscellaneous deductions in excess of 2% of adjusted gross income 2,000

What amount must Buron report as alternative minimum taxable income before the AMT exemption for 2014?

a – 84,000

b – 86,000

c – 88,000

d – 92,000

B

Certain itemized deductions are not deductible in computing an individual’s AMTI. Specifically, no AMT deduction is allowed for state, local, and foreign income taxes, real and personal property taxes, and miscellaneous itemized deductions subject to the 2% of AGI floor. Here, Buron’s $4,000 of real property taxes and $2,000 of miscellaneous itemized deductions must be added back to his $80,000 of regular taxable income before personal exemption to arrive at Buron’s AMTI before AMT exemption of ($80,000 + $4,000 + $2,000) = $86,000.

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

[The_AmYam]

Which of the following itemized deductions are deductible when computing the alternative minimum tax (AMT) for individuals?

a – state income taxes

b – home equity mortgage interest when the proceeds where used to purchase an auto

c – Medical expenses amounting to 10% of adjusted gross income

d – Home equity mortgage interest when the loan proceeds were used to add an additional room to the house

d

State income taxes, medical expenses amounting to 10% of AGI, and home equity mortgage interest expense when the loan proceeds are not used to buy, build, or substantially improve the home are not deductible in computing AMT for individuals. In contrast, home equity mortgage interest expense is deductible in computing the AMT for individuals if the loan proceeds were used to buy, build, or substantially improve the home.

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

[The_AmYam]

Those are all I have flagged right now – there is a simulation in Wiley for Individual AMT but I haven't checked Becker to see if it is there too. But these should give you a good idea of the calculations and if you understand it.

If i come across any more this week (there are a few I haven't answered yet) I will put them up for you. I think if you get the Corp, though, you can do individual.

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

[The_AmYam]

I have a question on Sec. 179 expense deduction:

Becker says the max is $25,000 reduced dollar-for-dollar amounts placed in service in excess of $200,000…

meanwhile… over in Wiley…

it says the max is $500,000 reduced dollar-for-dollar amounts placed in service in excess of $2million.

that's a rather large variance there in those limits. can anyone provide some insight for me!?!! i think i will go with the becker limits on the actual exam, i guess… but it makes me nervous.

anyone? please help!

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

[Gabe]

@am_yam thanks! And don't let the comprehensive exam shake your confidence. Bottom line: you're not going to know everything going into the exam. There will be questions that you'll ace and others that will leave you saying WTF. But in the end, I truly believe you have prepared enough and are ready to SLAY REG! You CAN do this!

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

[The_AmYam]

is it individual vs. corp limits?

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

[The_AmYam]

Thanks Gabe!!!! I was freaking out this morning but I did a lot of E+P and feel much better after really drilling that today.

I think I'm extra nervous since I have passed it before, I feel like I know the stuff, but I'm worried that I dont really actually know it, I just know the questions. lol if that makes sense!

Hopefully these AMT questions will help you out. I will be available on here after i take the test if you have any questions as you finish your review. You're almost done so anything I can do to help your last little bit of review to get you there, I would be happy to help.

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

[Gabe]

Thanks am! I definitely will! I didn't know you took REG before. This is my first time and I don't like walking into the unknown and I am sure I will be freaking out even more next weekend…What E&P questions are you talking about? I don't recall Becker or Ninja having a lot of E&P calc questions, but I could just be blocking it out. As for your previous question: Sec 179 was $25k for 2014 and only 2014. The $500k amount was used prior to 2014 and is in effect now I believe. I have been using the $25k number, since we should be utilizing 2014 rules.

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

[Author]

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