[jeff]

Welcome to the Q1 2016 CPA Exam Study Group for REG.

Some BLITZ videos to help your exams: https://www.another71.com/ninja-blitz

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

[nib]

hello ,

check below site

https://www.irs.gov/publications/p505/ch04.html

copy pasted paragraph from that site , shows 3 % penatly tax rate .

Worksheet for Form 2210, Part IV, Section B—Figuring the Penalty

Figure the amount of your penalty for Section B using the Penalty Worksheet in the Instructions for Form 2210. The penalty is imposed on each underpayment amount shown on Form 2210, Section A, line 25, for the number of days that it remained unpaid.

For 2014, a 3% rate applies for the following periods — April 16 through June 30, July 1 through September 30, October 1 through December 31, and January 1, 2015 through April 15, 2015.

[nib]

hello friends ,

please help me with the following question .

question:The earliest time a purchaser of existing goods will acquire an insurable interest in those goods is when: ?

Wrong anser:“title passes to the purchaser.”
Correct answe : “the goods are identified to the contract.”

Explanation=Title passes from the seller to the buyer only if the goods are identified in the sales contract. A buyer has an insurable interest from the time the goods are identified in the contract.

My question is,
1) What is remarkable difference between title and insurable interest and ownership .

2) If I purchase goods with “ FOB destination “. In that case , title will transfer to purchaser when goods delivered to destination .At that moment , insurable interest will also transfer to buyer. After that buyer can insure goods received .
During shipment any loss incurred will be paid by seller . So in that case seller will insure goods in transit

3) so what is the exact meaning of “A buyer has an insurable interest from the time the goods are identified in the contract.”

[rosecpa]

Both a buyer and a seller can have an insurable interest in the goods. Even if it's fob destination, you could still have an insurable interest.

[rosecpa]

Amor d, it looks like the c Corp and partnership basis calculations make sense, but isn't an s Corp treated like a partnership in terms of basis?

[Anonymous]

@Rose, thanks for your feedback. I am not sure now for S Corp. LOL
Each time I study entities separately, I know what I am doing with the basis computation. But once I hit the adaptive learning, then things get shuffled in my brain.
Can someone help with S Corp's computation of basis. Thanks guys!

[Anonymous]

Accordingly, the following statement is false:
Depreciation on personal property to arrive at AMTI before he ACE adjustment is SL over the MACRS recovery period.
Explanation:
Depreciation on personal property to arrive at AMTI before the ACE adjustment is:
(A) SL (if used for regular tax “RT”) over the class life, OR
(B) 150% DB (if SL is not used for RT) with a switch to SL over the class life.
Note: The class life used for AMT is not necessarily the same as the recovery period used for RT.

WHAT DOES REALLY RT AND AMT REQUIRE IN PERSONAL PROPERTY DEPRECIATION?
SL, 150%-DB, OR MACRS?

[EmilyT84]

Hi!!

Can someone please explain what the difference is between these two numbers? I have researched this online but cant really find any explanation.

There are two different numbers floating around for the unified exemption credit for gift and estate tax:
for example: 2014 $2,081,800 and $5,340,000 for 2014. I am aware of the $5,340,000 but not sure what this other $2,081,800 exemption amount is. If anyone knows, please help

Thanks

[rosecpa]

EmilyT84

First of all, the numbers have changed as of 2015. The Estate tax is applicable on amounts over 5,430,000, and the unified credit is 2,117,800.
The way that I understood the relationship between the two (according to becker), is that the unified tax credit is essentially about 40% of the 5,430,000 that is exempt from estate tax. This calculation leaves anything over 5430,000 Subject to a tax liability.

[EmilyT84]

Hi RoseCPA,

So does this mean that the unified tax credit reduces the tax liability owed if your estate exceeds the $5430000? So, for instance, estate is $6000000, then 5430,000 is exempt and 570,000 is taxable but we can reduce the 570,000 by the 2117800 credit (up to the 570,000).

This is super confusing for me, any info would be much appreciated

Thanks!!

[nib]

Gross gifts for the current period
– Deductions
————————————–
= Taxable gifts for the current period
+ Taxable gifts from prior periods
————————————–
= Total taxable gifts by the donor
x Unified tax rate
————————————–
= Gift tax on total gifts
– Gift tax computed on prior gifts using
the unified tax rate
————————————–
= Tentative tax on current gifts
– Applicable credit ($2,117,800)
————————————–
= Tax due on gifts of the current period
======================================

At death ,5,430,000 is exemption amount
decedent’s total gross estate < $5430,000 in 2015, No tax
decedent’s total gross estate > $5430,000 in 2015, 40 % tax

At death, a unified transfer tax with 40% is computed on total life and death transfers,

Then TAX is reduced by the
1)prior Tax paid on gifts made
2) credit =,$2,117,800
3), foreign death taxes,

[ahugemistake]

On June 15, 20X1, Alpha, Inc., contracted with Delta Manufacturing, Inc., to buy a vacant parcel of land Delta owned. Alpha intended to build a distribution warehouse on the land because of its location near a major highway. The contract stated that “Alpha's obligations hereunder are subject to the vacant parcel being rezoned to a commercial zoning classification by July 31, 20X2.” Which of the following statements is correct?

A.
If the parcel is not rezoned by July 31, and Alpha refuses to purchase it, Alpha would not be in breach of contract.

B.
If the parcel is rezoned by July 31, and Alpha refuses to purchase it, Delta would be able to successfully sue Alpha for specific performance.

Incorrect C.
The contract is not binding on either party because Alpha's performance is conditional.

D.
If the parcel is rezoned by July 31, and Delta refuses to sell it, Delta's breach would not discharge Alpha's obligation to tender payment.

Why is C wrong? A is right, but I felt C was right too.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Anonymous]

I think the Option C is wrong because of the phrase “THE CONTRACT IS NOT BINDING.”
I think the contract is binding to both parties subject to the conditional term/s (of rezoning the property to be approved by the govt.) prior to the buyer's subsequent performance of the agreement.

[ahugemistake]

Makes sense, thanks amor.

FAR - 78*
AUD - 66, 79
REG - 73, 76
BEC - 79

[Anonymous]

Hiya!
You're welcome.
How did you copy and paste that caption?

[EmilyT84]

Thanks Bin!! That was very helpful 🙂

[Author]

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