REG Study Group Q1 2016 - Page 63

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  • #748761
    Theodore
    Participant

    Hi guys. I am using the Becker review for the exam and there are a few things that are not clear to me, among one of them is the the like-in-kind exchanges. to figure out the basis the book tells me that is FMV of property received – deferred gain + deferred loss to find out the new basis of the property received, but when I do the MCQ the explanations tell me that it is the adjusted basis of the property given up + gain recognized – boot received + boot paid. Can someone help?

    FAR: 66, 76!
    REG: 76!
    AUD: 72, 9/7/2016
    BEC: TBA

    Don't Stop When You Are Tired, Stop When You Are Done.

    #748762
    Future Ninja
    Participant

    Bob Builder is a sole proprietor. During 2015, he incurred the following expenses:

    Rental payments for the next 2 years…..$3,000
    Country club dues (Bob frequently entertains clients at the country club)…..7,500
    Meal expenses incurred while meeting with clients…..1,500

    What is the amount of Bob Builder’s expenses that are deductible for 2015?

    A. $8,250
    B. $7,500
    C. $4,500
    D. $750

    AUD - 79 (expired) retaking July 28,2016
    FAR - 76 expiring July 31, 2016
    BEC - 85
    REG - 74,74,74,74,59,70,

    #748763
    Anonymous
    Inactive

    @ Future ninja first Federal tax refund is not taxable because it is return of your money what you paid.

    In the above question prepaid rent should be allocated to the related period , ie it should be expense for next two years not this year.
    meals and entertainment allowed upto % so 1500+7500= 9000/2=$4500 would be deductible.
    Is answer is C?

    #748764
    nib
    Participant

    @ future

    1) Club dues and membership fees. :– You cannot deduct dues (including initiation fees) for membership in any club organized for:

    Business,
    Pleasure,
    Recreation, or
    Other social purpose.

    chek this site for more info,
    https://www.irs.gov/publications/p463/ch02.html#en_US_2015_publink100033856

    2)rent payment deduction required only current year and not future years. So not deducted
    3) bob can deduct 50 % of Meal expenses incurred while meeting with clients…..1,500
    ans = 750

    #748765
    nib
    Participant

    https://www.irs.gov/taxtopics/tc403.html

    this irs site shows because interest on insurance dividend left on deposit boxwith the department of veteran Affair is not taxable.

    #748766
    nib
    Participant

    all

    please check my understanding

    1) Taxpayer’s state income tax of prev yr is itemized ded
    2) Prev yr Itemized ded> std ded
    3) Cur yr state income tax refund included in gros income= diff (prev yr itemized ded – std ded )
    4) there are many ninja mcq on above scenario

    ———–
    below information is new for me .so thanks .

    State tax refund: 1000
    Prior year itemized deduction: 750
    750 must be included in GI and the rest of 250 can be excluded

    #748767
    Anonymous
    Inactive

    Thank you Q1 peeps for all the help and support. I finally passed this beast!

    I had been in Q1 and Q4 both twice and Q2 and Q3 once for REG.

    I'll be hanging out more with Q1 and Q2-BEC folks moving forward!

    Good luck to all of us!

    #748768
    Anonymous
    Inactive

    @Amor D

    Congratulations!! I see it took a few attempts to pass this and I know you're super excited! Use this momentum for BEC!

    #748769
    mccorm1202
    Participant

    @Rosy0407
    To calculate basis for like-kind exchanges that is the correct calculation: FMV of property received – postponed gain + postponed loss.
    But the other equation is used to calculate a shareholder's basis in a corporation: Basis of property transferred to the Corp. + gain recognized – boot received + boot paid. Hope this helps!

    BEC - 74, 73, 73, 79 DONE!!!
    AUD - 69, 75
    REG - 73, 77 (Lost Credit) 82
    FAR - 74, 76

    #748770
    Anonymous
    Inactive

    Memorizing and mastering these formulas helped me answer many MCQs correctly covering LKE:

    Realized G/L = FMV (Old) – AB (Old)
    OR
    Realized G/L = FMV (New) – AB (Old) + Boot Received – Boot Paid

    Recognized Gain = The lower of Realized Gain OR Boot Received
    {Recognize ZERO, if the lower value is below 0;
    Remember: Losses are never recognized in LKE}

    Deferred G/L = Realized G/L – Recognized G/L

    Basis (New) = AB (Old) + Recognized G – Boot Received + Boot Paid
    OR
    Basis (New) = FMV (New) + Deferred L – Deferred G

    #748771
    Anonymous
    Inactive

    @Amor D Congratulation on your pass, give us some suggestion how to master the AL for Reg.

    #748772
    Anonymous
    Inactive

    @mccorm1202 In you tube there is free Roger video for the like kind exchange and I find that video very helpful.
    In order to find out the value of item what you receiving is to pass the journal entry

    New item (what you receiving) Balancing figure
    Your liability
    Loss
    To item you given
    To liability you are assuming
    To gain realized

    #748773
    Anonymous
    Inactive

    Thanks @Ano.

    First, what CPA materials are you using when practicing SIMs?

    #748774
    Anonymous
    Inactive

    I have YAEGER and Ninja mcq

    #748775
    Anonymous
    Inactive

    I was using Becker and NINJA for REG and my NINJA has already expired last month.
    As far as the interface of the Research Tab, Becker's AL resembles really close to the AICPA actual test software.

    During the preparation time from my recent attempt, I decided to familiarize myself with the AL functionality since it's going to be sure 1/6 point out of the 40% portion (SIM) of REG.

    I created my own outline and laid out the table of contents.

    Table of Contents

    Authoritative Literature
    -IRC
    -AICPA Professional Stds

    IRC
    -Subtitle A – Inc. Taxes 0001 – 1564
    B – Estate & Gift Taxes 2001 – 2801
    C – Employment Taxes 3101 – 3510
    D – Misc. Excise Taxes 4001 – 5000
    E – Alcohol, Tobacco, & Certain Excise Taxes 5001 – 5891
    F – Procedure & Admn. 6001 – 7874
    G – The Joint Committee on Taxation 8001 – 8023
    H – Financing of Presidential Election Campaign 9001 – 9042
    J – Coal Industry Health Benefits 9701 – 9722
    K – Group Health Requirements 9801 – 9834

    AICPA Professional Stds.
    -Tax Svcs [TS]
    -Section 100 P – Tax Return Positions
    200 A – Answers to Questions on Returns
    300 C – Certain Procedural Aspects of Preparing Tax Returns
    400 U – Use of Estimates
    500 D – Departure from Position Previously Concluded in an Admv. Proceeding or Court Decision
    600 K – Knowledge of Error: RPAP [Return Preparation & Administrative Proceeding]
    700 F – Form & Content Advice to TPs

    Subtitle A – Income Taxes 0001 – 1564
    Chapter 1 Normal Taxes & Surtaxes 0001 – 1400
    Chapter 2 Tax on Self-Employment Income 1401 – 1403
    Chapter 3 WTax NRAs &Foreign Corps 1441 – 1465
    Chapter 4 -Repealed-
    Chapter 5 -Repealed-
    Chapter 6 Consolidated Returns 1501 – 1564

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