[jeff]

Welcome to the Q1 2017 CPA Exam Study Group for REG. 🙂

[RE2PECT]

@dtatham10- I'm in the same boat, but might consider pushing mine back instead of up. Been sick for the past week and haven't done much studying the past few days. Tried fighting through it, but felt like I was doing more harm than good by studying when I felt like crap.

I had been mainly doing Gleim mcq's up until last week and was only averaging 68% after like 2000 mcq's. I know that's not great, but their questions are insane for the most part. Since I switched back to Ninja, I'm averaging 82% after going through all the individual tax questions. Could have been better, but I was making stupid mistakes by attempting them while sick and not thinking clearly.

I have 3 more tries at REG before losing FAR (9/30/17), but definitely don't want to take it in Q2 and have to wait 10 weeks for my results. Right now I'm scheduled for 1/17, but might even consider pushing it back a little if I feel I'm not ready. Guess I'll see how my scores are as I work my way through Ninja since their questions are more in line with what my exam was like.

Judging from your posts, it seems like you have a good handle on REG and it comes down to taking it when you feel like you're ready. If there's any doubt in your mind then maybe give yourself an extra couple weeks to review. I know it's tough because we're both so close and you may start doubting yourself at this point. I'm feeling the same way and want to make sure I give myself the absolute best chance to pass this next time around.

Hope everyone has a happy and healthy New Year!

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[JMG]

Belson and Forman decided to terminate North partnership. On the date of termination, North's balance sheet was as follows:

Adjusted Basis
Cash $2,000
Equipment (fair market value $4,000) 6,000
Capital – Belson 4,000
Capital – Forman 4,000

Forman's outside basis is $2,000. The partnership assets were distributed equally between the partners. What is Forman's tax basis in the property received?

A.$1,000 Correct
B.$4,000
C.$6,000
D.$10,000

Why is FMV used here instead of basis on the equipment? I thought basis was the rule of thumb in liquidations.

[RE2PECT]

@ JMG- For a complete liquidation in a partnership, the basis in any property received is whatever basis the partner has left after receiving cash or other assets like receivables and inventory.

Forman received $1000 cash ($2000*50%) reducing his basis to $1000. His basis in the equipment then becomes $1000, which is his remaining outside basis in the partnership.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[JMG]

@re2pect Ninja explained it as 1/2 the FMV of the equipment less his share in cash received which threw me off because I never read anything in Becker about using FMV.

[RE2PECT]

@ JMG- The way I look at it with liquidations of partnerships is that you always reduce the partner's basis by cash and other “hot assets” (unrealized receivables and inventory) first. Whatever is left over automatically becomes your basis in the property received.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[aatoural]

@dtatham10 – If you are scoring like that because you think you have memorize the content why don't you just focus on the concepts you honestly know are still weak areas for you and leave the other for progress tests alone? Don't push it more back that is just going to burn you out more.

For those of you that are done studying for 2016 HAPPY NEW YEAR!

I'll be here for 3 more hours then Im out for the year. Or might study some at night while we wait for midnight, but probably not. LOL

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[HoosierCPA]

@aa no I was trying to say I feel like I understand the concepts and that's what scares me for having a test date so far out. Do I keep the same test date and just try and retain it for the next month and a half or move the test up? I'll have a better idea when I get to these final 4 chapters

FAR - 78
REG - 72,74,71...please just go away REG nobody likes you!
BEC - 82
AUD - Aug 16

[aatoural]

Why don't you try and schedule it for the end of January. i think end of February is too far ahead and it is not the first time you are going over the material so it should not take you as much.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[Namstut]

Question: does Ninja block posts with any references to external links related to free review?

I've tried to post 2 times now. Maybe I am not seeing them on my end but in reality they show up. My apologies if there are a bunch of similar posts from me.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[RE2PECT]

At the beginning of the year, Cable, a C corporation, had accumulated earnings and profits of $100,000. Cable reported the following items on its current-year tax return:

Taxable income $50,000
Federal income taxes paid 5,000
Charitable contributions carryforward 1,000
Capital loss carryforward 2,000

What is Cable’s accumulated earnings and profits at the end of the year?

Incorrect A.
$145,000

B.
$146,000

C.
$148,000

D.
$150,000

You answered A. The correct answer is C.

The basic idea behind the calculation of a corporation’s earnings and profits (E&P) is to determine the amount of “earnings” that is available to distribute as dividends.

Cable’s accumulated earnings and profits at year-end are $148,000, computed as follows:

Earnings and profits at beginning of year $100,000
Add: Taxable income 50,000
Less: Federal income taxes paid (5,000)
Add: Excess charitable contribution carryforward 1,000
Add: Excess capital loss carryforward 2,000
Cable’s accumulated E&P at year-end $148,000

The reason the excess charitable contribution carryforward and the excess capital loss carryforward are added back to taxable income is because both were deducted in a prior year to compute the beginning-of-the-year accumulated earnings and profits. This year, when the charitable contribution and capital loss are actually deducted on the tax return, they both must be added back to the calculation for accumulated earnings and profits.

I'm still not getting why the charitable contribution and the capital loss are added back. Can anyone help clear this up?

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[Namstut]

@re2pect charitable contributions and capital losses are added back because they were originally deducted for taxable income for calculating taxable income for current year. You have to add them back because they are related to prior year. During prior year calculations of accumulated E&P for that year $1,000 was included in the calculation. Also the capital loss of $2,000 was deducted from the taxable income.

The simple way to think about it – your accumulated E&P should represent your actual income and expenses. Carry-backs and carry-forwards are temporary adjustments that will eventually “wash” for the cumulative E&P when they are fully exhausted.

I hope this makes sense.

AUD 7/6/16 Passed
BEC 9/3/16
FAR TBD
REG TBD

[aatoural]

That was a good one. I need to review more on what adds or subtract to E&P as well.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[aatoural]

@namstut – I don't see the links you were trying to post either.

BEC - PASSED
AUD - 8/29/16
FAR - TBS
REG - TBS

[RE2PECT]

@Namstut- Thanks it makes more sense now! Sometimes you need to have someone explain it in layman's terms for it to sink in.

I didn't see any of your posts either. The same thing happened to me yesterday when I was trying to post a link from Roger's site. I posted it like 4 different times and it finally went through after other people had already posted.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[JMG]

Here's to everyone having a happy and successful 2017! I'm going to hit up some MCQs for a while and then enjoy some time with friends tonight bringing in the new year.

Estate and gift tax are the last two things I have to get through in the book and then it's on to the review phase. I'm actually doing a three week review before my exam, one week for Blaw and ethics/professional responsibilities and two weeks for tax. I've had a lots of ups and downs with this material but I'm feeling pretty good about it at the moment.

[Author]

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