[jeff]

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

[aatoural]

Sorry. No Miami FL bad weather in winter here. Unless you count humidity. 🙁

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

[aatoural]

Jack and Jill are married and agree to split the gifts that they made during 2016. Jack gives his nephew, James, $37,000, and Jill gives her niece, Janice, $14,000. Which statement is true regarding Jack and Jill’s gifts?
A. None of the answers are correct.
B. Jack and Jill must file separate gift tax returns, and each may take a $14,000
annual exclusion for his or her gift.
C. Jack and Jill must file separate gift tax returns and report one-half of each gift
on each return before applying the $14,000 annual exclusions.
D. Jack and Jill can combine their gifts of $50,000 on one gift tax return and take a
$14,000 annual exclusion for each recipient.

Answer (C) is correct.
Gift-splitting allows spouses to treat each gift as made one-half by each. This allows each spouse to exclude the first $14,000 of each gift of a present interest to a third person in a calendar year, for a total exclusion of $28,000 per donee. If the gift is less than the exclusion, the couple does not file.

Why do they have to file separate? I don't get it. I thought you put 1/2 of the gift in each line of Form 709 as made by each spouse.

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

[Anonymous]

Can anyone explain

Richard Norton is required to pay a self-employment tax based on the net profits of the farm business. For purposes of this task (Self-Employment Tax), assume that Richard had a net profit of $105,000 from the farm business for Year 3 and $10,000 of Section 1231 gain. Also assume that the maximum net income for social security tax is $117,000 for Year 3. Assume the following rates: 12.4% for social security and 2.9% for Medicare.

Calculate total amount of self employment, net earnings from self employment tax ,self employment tax and adjustment for self employment tax paid.

I am not able to understand Becker solution.

Thank you guys.

[Anonymous]

The amount subject to self-employment tax is 92.35% of your net earnings from self-employment.

So always take 92.35% of your earnings like in this case 105,000 * 92.5 = 96,968 and then apply the 15.3% tax.

This 92.35 is arrived by subtracting the adjustment claimed ( 100%-7.65%) right ? .Just don't understand why we take 92.35 and then again deduct 15.3% self employment tax from that net earnings from self employment.

[EBRAHIM]

Hey guys I have my exam coming up in few days.

Can someone explain how to calculate shareholder and corporation basis for S corporation? Also, Can someone explain the per-share per-day basis for shareholders selling their share in s corporation to a new shareholder?

Further, how to calculate the estimated tax liabilities payments for the year to avoid penalties taking into considaration the withholdings?

Would appreciate if someone could share with us examples explaining the above

[Namstut]

@aatoural Each spouse must file an individual 709 – there is no Married Filing Jointly 709.

https://www.irs.gov/pub/irs-pdf/f709.pdf

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

[aatoural]

Ohhhh that is what they meant by that.

Thanks namstut

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

[Namstut]

You are welcome @aatoural!

How is everyone doing? I started studying for FAR and I am having major withdrawals from REG. Haha! So far REG has been the hardest one for me but I think it was my favorite one to study for.

@dtatham10 have you scheduled your exam yet? 😉

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

[aatoural]

It is going. I am glad to say I have had a pleasant day with GLEIM mcps today. Either corporate deductions and ethics and circular 230 mcqs were not as bad as other sections on GLEIM, or I don't really need to study those topics anymore. I am happy today 🙂 Lets see how tomorrow goes ahahaha.

@namstut – isn't that ironic? LOL. I love the topic as well but so many rules that it makes is complicated.

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

[Namstut]

Keep plugging away @aatoural! You got this!
How are you planning on studying for FAR? I see you have it scheduled for 3/10 and it's about 6 weeks between the two exams. I am freaking out right now, I do not think that 8 weeks that I planned for FAR will be enough.

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

[HoosierCPA]

@namsut great to hear from you! I plan on getting my NTS today lol! I've been slacking big time, I feel like I'm setting myself up for failure but I still have time to turn this around! Good luck with FAR! I know ho frustrating that material can be!

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

[HoosierCPA]

So I'm trying to plug away through Gleim sims again. I have a question on the first unit.

What is the bare minimum position that must be sustained to avoid penalties?

I originally thought a reasonable basis WITH disclosure. But then I read this under the explanation and it makes me rethink!

“A return preparer may not adopt a position without substantial authority for the position. Whether a position meets the “reasonable belief of success” requirement is essentially a legal position. It is a conclusion as to whether substantial authority supporting the position might outweigh authority contrary to it.”

Then the explanation for the reasonable basis standard is:

“Taking an undisclosed position without a reasonable belief that it is more likely than not to be sustained on its merits results in a penalty of an amount equal to the greater of $1,000 or 50% of the income to be derived. If the position is disclosed, its tax treatment must have a reasonable basis.”

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

[HoosierCPA]

Stupid question: Gleim says gross negligence is sufficient in order to prove scienter. Gross negligence is reckless regard for the truth, there is no intent needed right? The definition of scienter is “legal term that refers to intent or knowledge of wrongdoing”.

You can commit gross negligence with NO intent? Might be splitting hairs here! lol

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

[aatoural]

@namstut – I have no idea how am I going to do it. But I had a couple of friends who did it in that time and advised me not to make it longer than 2 months because it is harder to keep all material fresh in the head. I will give it my 200%.

I plan on listening to lectures while I drive to get the train and back. Read and take notes while I take the train. That means about 2 hours round trip to and from work. Study an hour lunch at work and then come home to study. I even told my boyfriend I might not cook sometimes. But I do want to finish it all. I don't have kids yet so that helps.

@dtat – come on get it done. You've come so far to keep it hanging. You can do it.

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

[HoosierCPA]

@aa thanks for the encouragement. I'm studying every day…not long hours but it goes in waves there are some days that feel extremely productive and other days it feels like I'm just going through the motions not learning anything new. Gotta keep focused!!! I will not let this exam beat me!

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

[Author]

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