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November 20, 2014 at 6:25 pm #190226jeffKeymaster
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AUD - 79
BEC - 80
FAR - 76
REG - 92
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January 16, 2015 at 4:54 am #651961MrCPA511Participant
Gabe:
I'm not sure how to do this without the tables.. but since this is the only asset placed in the last quarter of the year, the mid quarter convention is used. Using the MACRs table for mid quarter convention in the 4th quarter, the value comes out to 3.57%. 25,000 x .0357 = $893 (approx)
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Can anyone explain the calculation for this one?
On December 1, 2014, Jeff Weber placed in service office furniture (7-year life), which cost $25,000. Jeff did not elect Section 179 expensing. The office furniture was the only asset purchased during the year. What amount can Jeff claim as depreciation under MACRS for 2014?
Correct A.
$893
B.
$7,000
C.
$1,000
D.
$4,000
FAR - 86 7/2014
AUD - 95 10/2014
REG - 87 1/22/15
BEC - 84 7/2015January 16, 2015 at 7:27 am #651962MikaParticipantTest your knowledge – Tax impact between C-Corp and S-Corp
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Venus owns 30 percent of a corporation. Serena owns 30 percent of a different corporation. Both of these corporations reported operating income this year (sales minus cost of goods sold and other operating expenses) of $200,000. Both corporations made a total cash distribution to the owners of $80,000. The company that Venus owns an interest in is a C corporation. The company that Serena owns an interest in is an S corporation. Which of the following statements is true?
A. Serena will report $36,000 more in taxable income this year from this ownership than Venus will report.
B. Serena will report $60,000 more in taxable income this year from this ownership than Venus will report.
C. Serena and Venus will report the same amount of taxable income this year from their ownership.
D. Venus will report $24,000 more in taxable income this year from this ownership than Serena will report
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 questionsJanuary 16, 2015 at 7:28 am #651963MikaParticipantAns. A
Most corporations are C corporations. They pay an income tax on their own taxable income and owners are only taxed when dividends are distributed. Venus owns part of a C corporation so that she must report dividend income this year of $24,000 ($80,000 distribution times 30 percent ownership. Some companies qualify as S corporations. They pay no income taxes but allocate pass through items and ordinary income to their partners. Serena will report $60,000 based on her ownership of this S corporation ($200,000 ordinary income times 30 percent ownership). Serenas taxable income is $36,000 higher than that of Venus ($60,000 less $24,000).
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 questionsJanuary 16, 2015 at 7:46 am #651964MikaParticipantThe Regostino Company is an S Corporation. During the current year, it reported the following results: $25,000 ordinary income (revenues minus cost of goods sold and other operating expenses), $1,100 in tax-exempt interest income, $100 interest expense, $800 in charitable contributions, and a section 179 deduction of $3,400. What is the income tax expense for Regostino? Assume a corporate tax rate of 20 percent.
A. Zero
B. $4,040
C. $4,320
D. $5,000
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 questionsJanuary 16, 2015 at 7:46 am #651965MikaParticipantAns. A
S Corporations (like partnerships) are flow-through entities. This term means that the shareholders of the S-Corporation report and pay individual income tax rates on their portion of income, deductions, and credits reported by the company. Some items such as charitable contributions, interest expense, and Section 179 deductions are assigned to the owners individually and reported directly by them. All remaining taxable income items are lumped together and reported as a single operating income figure to be allocated among the owners for their returns. However, the S corporation itself does not pay income taxes.
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 questionsJanuary 16, 2015 at 1:43 pm #651966The_AmYamMembergabe –
25,000/7 = 3571 annual amount
3571 * .125 (the mid quarter % for Q4) = 446
446 * 2 = 892
not sure why you multiply by 2 but that gets you there.
Mid-Q percentages:
Q1 – 87.5
Q2 – 62.5
Q3 – 37.5
Q4 – 12.5
REG - 81
FAR - 79
AUD - 94
BEC - OCT 15January 16, 2015 at 1:55 pm #651967GabeParticipantAm yeah I got to the 446, I just didn't see a reason to multiply by 2. I chose the right answer, but still.
Also, are we supposed to know all the quarterly percentages?!
CPA, CFE
CISA- Experience will be completed by August 2016January 16, 2015 at 2:09 pm #651968The_AmYamMemberthis is a somewhat good explanation – I think you multiply by 2 b/c it is double declining balance.
that is also what my tax director here at work said…
I would know them. I vaguely remember that I memorized them the last time I took it – I cant remember if I actually needed it or not, but I definitely studied it. It's what I'm working on memorizing today.
I am going to be checking in throughout the day today, but I will be offline tonight until after my exam tomorrow. not sure about the rest of the weekend after that – will plan on checking in with you Monday to see if you need help on anything.
REG - 81
FAR - 79
AUD - 94
BEC - OCT 15January 16, 2015 at 3:40 pm #651969s2sylvirMemberI've got a SIM question,
On some of the sims, for example one where we list out the “Deductions on this return not charged against book income”, I noticed the answer key had the answers as negative numbers (which makes sense, I guess).
But in another example, where it had us add up nonseparately stated expenses, the answer key had positive numbers for the expenses…..
Like how are we supposed to know if the exam wants the numbers written as positives or negatives? -.-
BEC - PASS (79)
AUD - PASS (63, 71, 74, 74, 83)
REG - PASS (88)
FAR - PASS (58, 89)Becker for all + FAR 10 Point Combo
January 16, 2015 at 4:13 pm #651970The_AmYamMemberin some of the SIMS, subtotals calculate for you, so I use that to gauge how to input the #'s… to get the correct subtotal.
In others, I go with absolute values unless it clearly says something input as a credit () or N/A or input zero or those special instructions. I don't know if that's the “right” way to do it or not…
REG - 81
FAR - 79
AUD - 94
BEC - OCT 15January 16, 2015 at 4:36 pm #651971omalloyMemberA perfect question to take M-1 notes from:
For tax year 2014, Oaktree Corporation's books and records reflect the following:
Net income per books (after tax) $52,800
Tax-exempt interest 500
Excess book depreciation 7,222
Capital losses 3,000
Federal income tax 8,478
Excess contributions 1,710
Premiums on officer life insurance (payable to corp.) 1,500
Meals in excess of 50% limitation 400
What is the amount of Oaktree's taxable income as it would be shown on Schedule M-1 of its corporate income tax return?
Correct A.
$74,610
B.
$77,110
C.
$76,610
D.
$75,110
You are correct, the answer is A.
Net income per books $52,800
Add back:
Federal income tax + 8,478
Capital losses + 3,000
Depreciation + 7,222
Officer life insurance + 1,500
Meals in excess of 50% limitation + 400
Excess contributions + 1,710
Total $75,110
Deduct: Nontaxable interest 500
Taxable income $74,610
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Corporations are not allowed a deduction for capital losses. Corporate capital losses are only deductible against capital gains.
Contributions are limited to 10% of taxable income.
FAR 65, 70, 78
REG 64, 76
BEC 70, 80
AUD 81Ethics 96
Péter un plomb
January 16, 2015 at 4:46 pm #651972s2sylvirMemberYeah, that is definitely something I should use to my advantage! But both of these were just a simple table and a subtotal cell, it didn't flow to the return so I had no idea…
But I think I will do what you said about the absolute values :O Thank you!
BEC - PASS (79)
AUD - PASS (63, 71, 74, 74, 83)
REG - PASS (88)
FAR - PASS (58, 89)Becker for all + FAR 10 Point Combo
January 16, 2015 at 4:48 pm #651973JennyParticipant25,000/7=3571.43
3571.43/4 (4 qtrs)= 892.86
That is how I calculated for the Mid Qtr
AUD - 76
BEC - 86
FAR - 76
REG - 76Oklahoma CPAOklahoma Candidate
AUD - Pass (8/14)
FAR - Pass (11/14)
REG - Pass (2/15)
BEC - Pass (11/15)
Ethics Exam - Pass (12/15)January 16, 2015 at 5:06 pm #651974teamryan15MemberI ve got a question from the first set of Sims in ch2 of Becker Question 2.
From this information below how can we tell that the TP itemized in the previous year?
“The Romans received a $200 state income tax refund on the prior years tax. The Romans had deducted $2,000 of state income taxes in the prior year, all of which resulted in federal tax savings”
January 16, 2015 at 5:21 pm #651975AnonymousInactivehey so if i was a C Corp and wanted to elect S Corp status and it was Year 2 say March 1, would i be considered S Corp for Year 1 because i declared before March 15 or would it be starting January Year 2?
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