[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

[Anonymous]

And here's another one.
My goodness Mr. Regulations, what have I done to deserve this torture?
It's like, some days are good, some days are bad. We'll take the entire cost and next year, we'll take ZERO….

Joe Dock placed into service Section 179 property that cost $225,000. What is the maximum amount Joe can expense for 2015?

A.
$500,000

B.
$50,000

C.
$2,500,000

Correct D.
$0

Joe can expense $0 for 2015. The maximum dollar amount for 2015 is $25,000, and the threshold amount for 2015 is $200,000 for total cost on qualifying property.
•Total cost exceeding threshold: $225,000 − $200,000…$25,000
•Expensed: $25,000 − $25,000…$0

[ahugemistake]

I'm gonna just try to remember the 2015 rules. Since the 179 deduction is so low, you have to keep an eye on those equipment that are above 200K

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

[ahugemistake]

Re: Stock Dividends

so if I understand this correctly: if you are offered cash or stock dividend and you pick the stock, it is included in income at the fmv.

but stock dividends paid other wise are not included, for example stock splits are not included.

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

[Anonymous]

Why would this problem have to mention this phrase “SUSAN DOES NOT USE THE PRINCIPAL RESIDENCE”?
What am I missing on this scenario?

Susan inherits her father's house upon his death. At the time of the inheritance, the father's basis in the property was $100,000. The fair market value of the house at the time of the inheritance was $90,000. The alternative valuation method was not elected in regard to the father's estate. Susan does not use the house as her principal residence and subsequently sells the house for $95,000. Susan will include a capital gain/loss of what amount on her individual tax return in the year she sells the house?

Correct A.
$5,000 gain

B.
$5,000 loss

C.
$0 gain

D.
$95,000 gain

Explanation:
The basis of inherited property is generally the value of the property (as determined for estate tax purposes) at the decedent's date of death. The estate tax value is generally the fair market value of the property as of the date of death. In certain limited circumstances, the executor or personal representative is permitted to elect an alternate valuation date. In such a case, the basis will be the fair market value six months after the date of death or upon sale within six months.

In this question, Susan's basis in the property is $90,000 (the fair market value at the time of the inheritance). Thus, when she sold the property for $95,000, she incurred a $5,000 gain.

IRC Section 1014(a)

[nib]

@ amor D

1)Tax Rule = Taxpayer use house for 2yrs out of 5 yrs as a principal house . Then gain on sale of property would not have taxed upto 250,000 for individual and MFJ = 500,000 ., Above limit gain is included in gross income and taxed .

2) In the scenario , susan using house as principal house . Then susan would have not included her 5000 gain in gross income so no tax on 5000 gain .

But in above question it was not her principal house , So no exemption for gain amount and so Gain 5000 would be taxed .

[Anonymous]

@Bin, thanks.
It just clicks like a bulb light.

I thought I was only answering estate, gift, valuation problem. Haha.
I am fried. I've done 230 MCCQs today.

[rosecpa]

So just to make sure I got this (again)

there could be 3 components of depreciation: the section 179, the 50% bonus, and then the standard-either straight line, 150 or 200% MACRS?

And when using straight line, do you have to figure in the half year convention, or do you automatically deduct the full amount?

[pracap]

Hi All,

Am having tough time in understanding the following –
confused with C corp, S corp and Partnership –
1. Formation – basis and gain/loss
2. distribution (nonliquidating & Liquidating) – basis and gain/loss

Has anybody made a comparison between the 3 entities with regard to formation and distribution?

thanks in advance

[nib]

Friends ,

Bonus % applied is as per year mentioned in the question .

1)Joe Dock placed into service Section 179 property that cost $225,000. What is the maximum amount Joe can expense for 2014? –
Year is 2014 , 50 % bonus ( purchase cost – 500000 )
225000< 500000 = so bonus amount=0

2)Joe Dock placed into service Section 179 property that cost $225,000. What is the maximum amount Joe can expense for 2015? –
Year is 2015 , 0 % bonus
So bonus amount=0

3) If question is about 2016 year , what would be % of bonus and 179 deduction amount ??

[ahugemistake]

Since the questions are about tax year, it is always referring to the prior year in the question. The CPA exam is testing the 2015 numbers this year, next year they will test the 2016 amounts.

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

[ahugemistake]

@pracap hope this helps you: https://www.bizfilings.com/learn/compare-business-types.aspx

Since these topics are very general, you should be able to find abundant resources via google or even youtube.

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

[nib]

@ NJcpa2012-

1) compensation is given at fair value = 13000 .

2) Logan paid purchase amount = $ 10,000 (1000 shares * $ 10/share)
Whereas FMV= $ 25,000 = 1000 shares * $ 25/ share.
So difference amount = 25,000-10,000 = 15,000 = compensation he has received .

3) total w2 amount= 60000 sal + 13000 bonus shares + 15000 on 1000 shares purchased=88000

[ahugemistake]

@rose you are right, I still need to do some more problems on this topic. are you using ninja?

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

[ahugemistake]

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

[rosecpa]

No. Becker and cpa Excel

[Author]

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