REG Study Group Q1 2015 - Page 71

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  • January 19, 2015 at 5:45 pm #652096
    Gabe
    Participant

    @wantthat- yep!

    Anyone dumb down “at risk” rules for me?

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

    January 19, 2015 at 5:53 pm #652097
    WantThatCPA
    Member

    @gabe at-risk amount limits the amount of losses that can be deducted. it is generally calculated the same as calculating a partners tax basis in which you take what they contribute and add any liabilities assumed. the at-risk amount is different because it would NOT include any non-recourse debt.

    ex: contributes $20k cash, assumes $2k recourse debt and $5k nonrecourse debt.

    tax basis=$27,000 (20,000+2,000+5,000)

    at-risk amount=$22,000 (20,000+2,000)

    January 19, 2015 at 6:03 pm #652098
    Gabe
    Participant

    thanks @wantthat. It applies to S corps individuals, partnerships, closely held c corps, yeah?

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

    January 19, 2015 at 6:05 pm #652099
    WantThatCPA
    Member

    @gabe that I am not sure of. I know it applies to partnerships and an LLC that elects to be taxed as a partnership.

    January 19, 2015 at 6:15 pm #652100
    pnielsen1982
    Member

    “My review course said it is 20 days…(not 10 days) anyone confirm my understanding? Thanks”

    @Mika – the rule used to be 10 days and now it is 20 days, so some of the older questions have the 10 day value listed in the problem (according to CPAExcel).

    CA licensed CPA

    AUD - 08/31/13 - 84
    BEC - 11/26/13 - 84
    FAR - 08/10/14 - 85
    REG - 11/30/14 - 72, 02/20/15 - 87

    What have I gotten myself into?

    January 19, 2015 at 6:40 pm #652101
    Gabe
    Participant

    @wantthat I confirmed that on the IRS website 🙂

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

    January 19, 2015 at 7:00 pm #652102
    WantThatCPA
    Member

    @gabe so it applies to S corps individuals, partnerships, closely held c corps and LLCs taxed as partnerships?

    January 19, 2015 at 7:07 pm #652103
    Gabe
    Participant

    @wantthat The at-risk limits apply to individuals (including partners and S corporation shareholders), estates, trusts, and certain closely held C corporations.

    https://www.irs.gov/publications/p925/ar02.html#en_US_2013_publink1000104672

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

    January 19, 2015 at 7:10 pm #652104
    WantThatCPA
    Member

    @gabe alright, thanks!

    January 19, 2015 at 7:44 pm #652105
    WantThatCPA
    Member

    can someone explain to me the de minimis rule?

    January 19, 2015 at 7:46 pm #652106
    Gabe
    Participant

    can you provide a question that you're stuck on in re: to de minimis?

    https://www.irs.gov/Government-Entities/Federal,-State-&-Local-Governments/De-Minimis-Fringe-Benefits

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

    January 19, 2015 at 7:53 pm #652107
    WantThatCPA
    Member

    @gabe is the limit for the rule $5,000? if each item is less than $5,000 than you can deduct them for tax purposes?

    January 19, 2015 at 8:02 pm #652108
    fightingforsanity
    Member

    @WantThatCPA

    I remember working on a question related to the de minimus rule last night. Yes, I believe the limit is $5,000. I tried looking it up in my becker book so that I could provide you a page number but can't seem to find it.

    FAR - ✓
    AUD - ✓
    REG - ✓
    BEC - ✓

    Don't give up!

    January 19, 2015 at 8:11 pm #652109
    WantThatCPA
    Member

    @gabe I found it! it was in the stupid appendix it is on R4-84 & 85. the maximum is $5,000.

    January 19, 2015 at 8:13 pm #652110
    fightingforsanity
    Member

    For you Becker folks, the de minimus rule is in the R4 Appendix. I completely forgot that that existed.

    “Companies can make a de minimus annual exp election regarding expenditures to acquire or produce property if they have a capitalization policy in effect as of the beginning of the year…..If a company has an applicable financial stmt, the max amount is $5,000. If a company doesn't have an applicable financial stmt, the max amount is $500.”

    FAR - ✓
    AUD - ✓
    REG - ✓
    BEC - ✓

    Don't give up!

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