[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

[njcpa2012]

Hello everyone! I am struggling with employee stock options…is there a straightforward way to understand the taxation rules around this?

[SkiHappy19]

I'm psyching myself out. Can someone confirm… We need to know the 2015 standard deduction, phase-outs, limits correct? My wiley book says 2014! Just want to confirm before I go crazy!!!

[Anonymous]

2015's figures have been testable since July, 2015.

Yes, we all can go crazy because most of the review materials (if not all) would even mention, the prior years, what had been approved in the past even in the years 1900. Dang Regulations. It's torture. Haha

[Anonymous]

According to the Securities Act of 1933, which of the following statements is correct regarding an issuer of securities?

A.
All securities issuers must provide potential investors with a prospectus containing specified information.

B.
An issuer is permitted to advertise an initial offering of securities only through distribution of the prospectus.

C.
All securities issuers must register the securities offering with the Securities and Exchange Commission (SEC).

Correct D.
If an issuer sells a security and fails to meet certain disclosure requirements, the purchaser may sell it back to the issuer and recover the price paid.

Explanation:
If securities are offered and sold and the registration statement contains material misstatements and/or omissions, the investor can sue for recovery of losses. The issuer can be sued and is absolutely liable for all misstatements.

I KNOW WHY LETTER C WAS INCORRECT. HOW ABOUT LETTERS A & B PLEASE?

[njcpa2012]

Logan, an employee of Argon Industries, earned a salary of $60,000 in Year 2. In addition, the following two transactions between Logan and Argon occurred in Year 2: Logan received a bonus of 100 shares of publicly traded stock worth $13,000 with a basis to Argon of $8,000, and Logan purchased 1,000 shares of unrestricted Argon stock pursuant to a nonqualifying stock option plan for $10 per share when stock was valued at $25 per share. What amount of compensation should Argon report in Logan's Form W-2 for Year 2?
a. $88,000
b. $60,000
c. $73,000
d. $93,000

The correct answer is A–why would that be? I'm not sure I follow the logic on this.

Why wouldn't the right answer be $93,000 (60,000 + 8,000+ 25,000)?

[rosecpa]

Amor D, Becker constantly reiterates the warning of not choosing an answer that is absolute: all, always, never, etc. In A, the word “all” is too inclusive, because (I think) private issuers are excluded from this. Choice B says that the “only” advertisement allowed is through a prospectus, which is too limited.

NJcpa2012- the compensation is given at fair value, not at the adjusted basis to the company.

[rosecpa]

I'm still waiting for someone to clarify the question that ahugemistake posted… about the bonus depreciation and 179 deduction.

[ahugemistake]

wait do we actually need to know the standard deduction limits or are those indexed amounts given on the exam?

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

[Anonymous]

Section 179 – Bonus

50% Bonus Depreciation will be extended through 2019. Businesses of all sizes will be able to depreciate 50 percent of the cost of equipment acquired and put in service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.

https://www.section179.org/

[rosecpa]

what does that mean in numbers, Amor D? Could you explain the example with the calculations?

[Anonymous]

Section 179 Tax Calculator
Cost of Equipment: $1,850,000

500,000……S-179 Deduction
675,000……50% Bonus Depr (1,850,000 – 500,000 = 1,1350,000 x 50%)
135,000…..1st Year Depr (675,000 x 20% Straight Line Depreciation 5-year life)
—————
1,310,000

Some problems indicate bonus is required for computation, others do not.

[ahugemistake]

Thanks for looking that up Amor.

Also how are you all feeling about AMT? I'm about to ready to throw the towel in on this thing, dont think I have the time to really understand it fully.

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

[Anonymous]

You're welcome.

My problem is basis & G/L computation with entities. If I review C corporation Monday and focus on MCQs, then S corporation on Tuesday/MCQs all day, then partnership on Wednesday, I AM FINE. I know what I am doing. But when I mix them all together, let's say the following Thursday do MCQs, I keep getting things wrong. The rules do not make any sense to keep them all straight.

[ahugemistake]

REG is a monster, I don't think I have ever felt this under prepared for an exam. I'm already thinking about my retake attempt and then have to re-study for FAR. I'll be working all week, and then have next saturday to review before my exam next sunday. I'll try to hit the big topics as much as possible but that's the best I can do I think.

I have the becker final review videos that I think will give me a little bit of boost, so hopefully I'll have enough time to squeeze those in.

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

[Anonymous]

I just saw a new S-179 problem.
I just don't understand why the rules are so fluid. On this problem, the total cost was simply expensed in full in the year of purchase. WHY? IS IT JUST BECAUSE OF THE EXISTING RULE IN 2014?

Joe Dock placed into service Section 179 property that cost $225,000. What is the maximum amount Joe can expense for 2014?

A.
$25,000

B.
$50,000

C.
$500,000

Correct D.
$225,000

Joe can expense $225,000 for 2014. The maximum dollar amount for 2014 is $500,000, and the threshold amount for 2014 is $2,000,000 for total cost on qualifying property.

Equipment purchases:………… $225,000
………………………First year w/o: 225,000
Bonus depreciation deduction:………….0
First-year deduction: ……………$225,000

[Author]

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