[jeff]

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Post by Another71.

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

[Anonymous]

The president of Deal Corp. wrote to Boyd, offering to sell the Deal factory for $300,000. The offer was sent by Deal on June 5 and was received by Boyd on June 9. The offer stated that it would remain open until December 20. The offer:

A.

constitutes an enforceable option.

B.

may be revoked by Deal any time prior to Boyd’s acceptance.

Incorrect C.

is a firm offer under the U.C.C. but will be irrevocable for only three months.

D.

is a firm offer under the U.C.C. because it is in writing.

(Answer is ‘B'.)

Can anyone say why this doesn't fall under the provisions of the “firm offer” rule? Is it because it doesn't explicitly say it's irrevocable? Thx.

[Anonymous]

What tax year is this section testing? 2013 or 2014?

[fightingforsanity]

@aspiring1accountant

A firm offer has to come from a merchant. It seems as if Deal Corp is just selling their factory but is not in the business of selling factories.

FAR - ✓
AUD - ✓
REG - ✓
BEC - ✓

Don't give up!

[NJPRU]

Tax rules and pronouncements for 2014 are being tested until June 2015.

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

IM GOING TO BE A CPA!!!!!

[Anonymous]

Thank you that's what I thought

[Gabe]

agree with @fighting:

2-205. Firm Offers.

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

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

[Anonymous]

Who's taking the test on Tuesday? I'm not as prepared as my 2 previous sections but I'm still hopeful I can pull it off. 3 days of cramming…

[Gabe]

I sit Tuesday! We got this!

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

[Anonymous]

Which of the following is a miscellaneous itemized deduction subject to the 2%-of-adjusted-gross-income floor?

A. Gambling losses up to the amount of gambling winnings

B. Medical expenses

C. Real estate tax

D. Employee business expenses

Answer is D.

Business-related expenses of an employee not reimbursed by the employer are deductible from adjusted gross income (AGI) as miscellaneous itemized deductions. These expenses are subject to a floor of 2% of AGI.

Real estate taxes are deductible in full in the tax section of Form 1040, Schedule A. Medical expenses are deductible on Schedule A subject to a floor of 7.5% of AGI.

Gambling losses may be deducted up to the amount of reported gambling income and are not subject to the 2%-of-AGI floor for miscellaneous itemized deductions.

I see the above question on the ninja MCQ. The answer lists Medical expenses are deductible on Schedule A subject to a floor of 7.5% of AGI.I thought the 2014 percentage was changed to 10%? This is Question #1155.

Thanks,

[Gabe]

Medical expenses are 10%

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

[NJPRU]

Gabeeeee! Hang in there! 2 more days!!

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

IM GOING TO BE A CPA!!!!!

[Gabe]

Thanks @NJ! PUtting in a full day today!

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

[Gabe]

Kate Lemon purchased a diamond pin for $6,000 in 2001. In 2014, when the value was $11,000, she gave it to her daughter, Ann. No gift tax was paid. If Ann sells the pin for $12,000, Ann's recognized gain is:

A.

$1,000.

B.

$5,000.

C.

$6,000.

D.

$0.

Answer is C. I thought the daughter's basis is the value at time of donation. Here is the explanation:

“The basis of property acquired by gift is the donor's basis if the property is sold at a gain”

So, if Ann sold it for $5k, then I would use the $11k amount?

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

[funtimesNOT]

I think you are getting that confused with inheritance. (because that is what i did) I think Inheritances are at the FMV at the time of donations but GIFTS are Gain basis=adjusted basis of donor. But if there is a loss basis than it is the lower of the a)FMV or B) basis of donor

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 🙂

[funtimesNOT]

Flagg and Miles are each 50% partners in Decor Partnership. Each partner had a $200,000 tax basis in the partnership on January 1, 2014. Decor's 2014 net business income before guaranteed payments was $45,000. During 2014, Decor made a $7,500 guaranteed payment to Miles for deductible services rendered.

What is Miles's tax basis in Decor on December 31, 2014?

A.

$211,250

Incorrect B.

$215,000

C.

$218,750

D.

$222,500

The correct answer is “C” am I missing something? this is from Ninja

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 🙂

[Author]

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