[jeff]

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

[HoosierCPA]

@tarheel I'm probably as credible as they come on what to focus on when it comes to the REG exam (I've taken it 4 times!). Tax is obviously first and most important. Nail that down. From there know the basics. Know your 1933 and 1934 Securities Act, Holder Due Course (real vs personal defense), all the general rules for breach of contract, yadayada.

This exam is all about beating the sims, which I have yet to figure out. I would suggest knowing your basis material inside and out. Estate tax is always a wild card–I would try and look into that. Separately vs non separately stated items are huge.

Things not to get in a fussy about (in my opinion) — AMT, M-1, E&P…know distributions against E&P are taxable dividends beyond that I would try and look at the calculations but I wouldn't lose sleep over it.

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

[aatoural]

@dtat – Why does the shareholder have a gain of 200. It should be the 50k(250fmv-200basis) and the 50k cash.

to the partnership I do agree because the distribution of cash all it does is reduce the partners basis and so does the distribution of property.

@re2pect – Damn with GLEIM!! I remeber Becker has like a couple sentences in their book in reference to abroad students but I think is only up to elementary school. High-school won't even qualify for that deduction.

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

[RE2PECT]

@Tarheel83- I'd also make sure you know ethics and professional responsibilities really well. It's not a lot of information, but it's a decent percentage of the exam.

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

[HoosierCPA]

According to this becker problem you take the FMV + Cash – the shareholders basis to get the gain. It doesn't appear you take the gain above the basis of the land like you mentioned:

“Mintee Corp., an accrual-basis calendar-year C corporation, had no corporate shareholders when it liquidated in Year 1. In cancellation of all their Mintee stock, each Mintee shareholder received in Year 1 a liquidating distribution of $2,000 cash and land with tax basis of $5,000 and a fair market value of $10,500. Before the distribution, each shareholder's tax basis in Mintee stock was $6,500. What amount of gain should each Mintee shareholder recognize on the liquidating distribution?
a.$4,000
b.$0
c.$500
d.$6,000
Explanation
Choice “d” is correct. When a corporation liquidates and distributes assets to shareholders, gain is recognized to the extent that the fair market value of assets distributed to a shareholder exceeds the shareholder's basis in the corporation's stock.”

So FMV Land 10,500 + Cash $2,000 – Shareholders Basis 6,500 = 6,000 gain

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

[HoosierCPA]

@re2pect I'm going to place the same rule on you that I gave to @aatoural NO GLEIM MCQ's!!!! haha

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

[RE2PECT]

Lmao I only post the crazy ones that shouldn't even be in there.

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

[aatoural]

@dtat – I remember that question. I don't understand it quite well.

@re2pect – lets just say we are showing you guys areas in GLEIM we DO NOT need to review ahahahah

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

[RE2PECT]

Here's a good one lol

Bethel Corporation distributed $125,000 to its shareholders on December 31, 2016, the end of its taxable year. Bethel’s capital structure was as follows:
Capital stock – 5,000 shares issued and outstanding: $500,000

Current earnings and profits 1/1/16-12/31/16 $ 15,000

Accumulated earnings and profits
3/1/12-12/31/15 $ 75,000

Mr. Rutland held 200 shares of Bethel Corporation’s stock. His basis in the stock was $100 per share. How much of the Bethel Corporation distribution is a dividend to Mr. Rutland?
A. $5,000
B. $3,000
C. $1,400
D. $3,600

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

[HoosierCPA]

@aa hmmm I may have to research this more when I get home. When I stumbled across that question this morning I actually put 0 gain, I accidentally went with partnership rules and thought no gain because boot didn't exceed shareholders basis. Right when I got to work I decided to post on here to try and get clarification. I think I'm just confusing myself even more! lol

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

[aatoural]

@re2pect – Is it D?

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

[aatoural]

@dtat – my answer always is 5.5K and of course is not even a choice. I read Becker multiple times and nothing. If you get a clear explanation please share.

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

[Tarheel83]

@dtatham10 and @RE2PECT

Thanks for the heads up! I forgot to mention that part of the MCQs that I have completed were professional responsibilities and ethics too. I agree it seems to be fairly easy points.

I will definitely take into account the items that you mentioned dtatham10.

[RE2PECT]

Nice one aatoural! I got it right too, but I guessed it lol.

Answer (D) is correct.
A corporate distribution is a dividend that must be included in the recipient’s gross income under Sec. 301(c)(1) to the extent it comes from accumulated or current E&P of a corporation. To the extent the distribution exceeds current and accumulated E&P, it is treated as a return of capital to the shareholder. Bethel Corporation distributed $25 per share ($125,000 ÷ 5,000 shares outstanding), Mr. Rutland received $5,000 ($25 × 200 shares) as his share of the distribution. Bethel distribution exceeded its E&P, so part of the dividend must be a return of capital. Only $18 of each dividend per share is deemed to have come from E&P ($90,000 E&P ÷ 5,000 shares outstanding). Therefore, Mr. Rutland’s taxable dividend income is $3,600 ($18 × 200 shares).

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

[HoosierCPA]

@aa so I'm not exactly sure how to post pictures on here so I hope this works!

To me Becker reads just like that problem. You take the FMV of property received + whatever boot you received and the amount that exceeds the basis of the shareholder is the gain.

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

[HoosierCPA]

@aa well apparently I failed. It's R3 page 45 (if you have becker).

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

[Author]

Replies