[jeff]

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

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

[HoosierCPA]

@jack no problem. I did confuse myself a bit which you will see later on with my discussion with @teal so if you know my original post is correct let us know.

Basically feeding off you example if I take on 49k in liabilities and the other party pays 30k in cash and 20k in liabities does that net to a boot of 1k received OR like I said with teal does the liabilities wash out to 0 because you can't have negative liabilities in your equation and give you a final boot received of 30k?

I just read through the section in the becker book and they don't even touch up on liabilities at all.

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

[Fk]

HI,

Can any one tell me what is the difference between Sec 1250 , sec 1245 and sec 1231 Asset

[Teal]

@dtatham maybe this wasn't worth spending so much time on, but I was researching this morning.

I am thinking your original assumption was correct since boot given was less than boot received, but if anyone knows for a fact, feel free to chime in.

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[Fine]

Hi all,

I have been studying REG for almost two months and have been scoring above 90% in Becker review in all chapters but have not been studying SIM so would like some recommendation regarding the SIMs. I am taking the exam Jan 11th so i would really appreciate it if any one can help me with the SIMs as I have never done taxes before. Thank you all for your time and help.

[alialzoubi]

A,B,C and D formed X corporation

Shareholder made the following contribution

A
B
C
D: my question related to D:he contributed $ 10.000 in cash property worth 40.000 and basis 5.000 with related assumed recorded liability of 20.000.

My question related to the X basis in D, as per beacker answers was as the following:

(D) contributed $10,000 cash and property worth $40,000. His gain realized is $35,000 ($40,000 FMV –
$5,000 basis). The liability relieved of $20,000 exceeds the basis of all property contributed (including cash)
by $5,000 ($20,000 liability – $10,000 cash – $5,000 property basis = $5,000 excess). Therefore, the
recognized gain is $5,000. Although it is not asked for in the question, the corporation's basis in the asset
is equal to the carryover basis of $5,000 plus the $5,000 gain recognized by Token, or $10,000.

But as per my understanding the answers is the greater of Adj basis or Debt assumed wiche is 20,000

Please help

[Teal]

@alialzoubi That is my understanding too. The liability that the corp assuming is the boot received and therefore $20,000 would be recognized as gain. However, there is one exception – if it is a tax-free exchange, then no gain will be recognized by the contributor. Not sure if this is the case and maybe he is recognizing some of the cash? I don't know….that is very odd.

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[alialzoubi]

Teal
Thank you teal,

I take the req on Dec unfortunately got 69 , I'm trying to go through reg again, The questions above represent simulation on Beacker and still not clear for me

[TXJAM]

Anyone use shapes to visualize Agency relationships?

[Namstut]

@saleh I would highly recommend doing SIMs. You will definitely test your knowledge of the concepts since these questions are multi-layered and are more complex than MCQs.

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

[Namstut]

@alialzoubi

You have to consider that in this SIM the shareholder also contributed cash, which reduced the amount of gain recognized by the shareholder.

If he contributed property ONLY with NVB of 5,000 and NO cash and the corporation assumed the loan of $20,000 then his recognized gain would be $15,000.

Therefore, Corporation's basis in contributed property would be $15,000 gain + $5,000 NBV of the property = $20,000. Which is the same amount as the assumed loan.

I hope this makes sense.

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

[HoosierCPA]

@ali yeah just reiterating @namstut. With corporation contributions.

The shareholder recognizes the BASIS whereas the Corp in an indirect way will end up recognizing the FMV. However, the calc doesn't work out by simply stating the corp assumes FMV. They will calculate it by saying the corp gets the basis of the property PLUS the realized gain on the contribution. In your example the $5k is the basis and the 15K is the realized gain which brings you to the 20k.

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

[onthewaytoacpa5]

Hi guys,

I have a quick question based on SIMs that I received on the REG exam.

If I am asked to fill out information for an estate tax return, but say only 20% of the activities relate to the estate and the other 80% is personal, how would I report all the activities on the estate tax return? Does it depend on the activities that they list? Don't really remember learning this or where I can find more information. I'm using Becker. Thanks in advance!

Also, any tips on at-risk amounts? I got a SIM on that as well and I'm not too sure how to calculate more advance at-risk amounts/related calculations. Thanks!

[jack yassa]

Hello guys,

I'm confused regarding the Sep and non sep stated items?

Does it differs from Corporations to Individuals to Partnership?
Thanks a lot.

[aatoural]

yes it does. a C corp is separately taxed entity. There is not separately stated items of income/loss. Just dividend distributions.
S corps and partnership, each have separately stated items of income.

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

[Teal]

Can anyone give an example of at-risk? I am having trouble with it.

FAR (66,68) Aug 26
REG (66) July 25
AUD (66) December 1st
BEC - October 3rd

[Author]

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