[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Post by Another71.

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

[Mika]

B – $20,000

Under IRC Section 351, transfers of appreciated property to a controlled corporation (80%) are tax free to the extent they are exchanged solely in exchange for stock in the corporation. If cash or other property is received, gain is recognized equal to the cash and fair market value of other property received, limited by the amount of appreciation in the property transferred to the corporation.

Dole was the sole owner of Enson, so he meets the control test. He transferred a building with a basis of $35,000 and a fair market value of $55,000, so the building has appreciation of $20,000. Dole received cash of $40,000 and Enson stock worth $15,000 in exchange for the building. Since he received cash, the exchange is not completely tax free.

The amount taxable is the lesser of the amount of cash received ($40,000) or the appreciation ($20,000), so Dole is taxed on $20,000.

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 questions

[wmcpa]

@Mika do you know what the rule on recognized (if that) with the following is?

wife owns majority stock of A s-corp

husband owns majority stock of B s-corp.

If A sells property to B lower than FMV, is there any gain/loss recognized by any of the (4) parties in the transaction?

FAR: 83
REG: 69, 69, retake Q1 2015
AUD: Q2 2015
BEC: Q2 2015

[Anonymous]

@funtimes Holder may become HDC if 1. Gave value for the instrument 2. Took it in good faith 3. unaware of any defects of the instrument. HDC is subject to real defenses but free from personal defenses.

Pay to order, only the payee specifically named is entitled, bearer means can be presented by anyone in possession of the instrument. Order instrument can be converted to bearer by blank endorsement (merely signing at the back). For example, a check made payable to the order of John Smith is an order instrument. When John signs the back of the check, it became bearer instrument, any person in possession of it can present it to the bank. But if he wrote “Pay to order of Jane Wayne” then signed it then only Jane Wayne is entitled to present the check.

[Mika]

Ninja #758

Which of the following organizations would not qualify for exemption from federal income tax?

A.College alumni association

B.Social clubs that allow only limited usage by general public

C.Fraternal society not operating under a lodge system

D.Political organization

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]

C @mika

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

[Mika]

Yes @ Gabe

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

[Mika]

Mandy is a limited partner in a limited partnership in which Strasburg and Hua are the general partners. Which of the following may Mandy do without losing limited liability protection?

I. Mandy acts as an agent of the limited partnership.

II. Mandy votes to remove Strasburg as a general partner.

a. I only.

b. II only.

c. Both I and II.

d. Neither I nor II.

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

[Mika]

The Answer is C, according to the answer – “A limited partner is allowed, without losing the protection of limited liability, to act as an agent of the limited partnership. The limited partner may also vote on the removal of a general partner.”

I am confuse here…I understand if a limited partner participates in the general management of the partnership (writing checks, signing contracts, hiring and firing, and making other management decisions) that individual loses the limited partner liability as limited partners have limited liability

So isnt the answer be d?

sigh…Wiley book question always confusing…

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

[Anonymous]

amout realized is FMV+ debt assumed by partnership, upon contribution – adj. basis of property transferred= realized gain

recognized gain= any cash received, any liab's in excess of basis, assumed by partnership on transfer of property.

partners basis= adj. basis +debt assumed by partnership – decrease in partners share of individual liabilty + plus any gain recognized (i.e liab>basis, any cash received, marketable securities).

partnerships basis in property= transferor's basis+gain recognized to partner on the contribution.

is this correct?

[Anonymous]

what is the amount realized, realized gain, gain recognized, transferor's basis, and corporation's basis in property contributed to a corporation, with liabilities on the property transferred, assumed by the corporation that qualifies for Section 351 treatment?

[Anonymous]

if anybody wants to give me there input, wiley can be a little vague. The basis calculations is the key to fully understanding these subjects everything else is simply learning the tax law for income, deductions and credits. The tax forms and the flow of information on them is straight forward, just need a little understanding.

[Anonymous]

Mika – That's a great question and I'd like to know the answer too. I would think it's A since they can act as an agent to the partnership but I don't understand how they can participate in voting?

[Gabe]

Not to be a downer, but if you had to do a re-take, how long would you study? 6 weeks? 5? What material would you use?

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

[NJPRU]

@Gabe – you wont have to retake!! lol

When I had to retaik Audit (I had gotten a 73), I tested again within 3 weeks. lol

On the REG front, ahhhhh. I'm studying R6 – not too bad, but I'm going through the motions of thinking I'm forgetting things, like adjustments and such. shoot me.

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

IM GOING TO BE A CPA!!!!!

[Gabe]

@NJ thanks 🙂 That's the weird thing…if I failed I won't get to re-take until April…so hang around for a month then start to re-study?

Also…keep going! Just think, you could be DONE soon! When do you sit?

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

[Author]

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