[jeff]

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

[Azsensation14]

Oh…. and I am getting WASTED sat night. For sure.

[Potat0eHead]

hi fellas! whoever is taking a break from REG study, would you mind distract yourself with the following MC question. lol Having hard time getting the right answer.

Bank Corp. owns 80% of Shore Corp.'s outstanding capital stock. Shore's capital stock consists of 50,000 shares of common stock issued and outstanding. Shore's Year 1 net income was $140,000. During Year 1, Shore declared and paid dividends of $60,000. In conformity with generally accepted accounting principles, Bank recorded the following entries in Year 1:
Debit (Dr) Credit (Cr)
Investment in Shore Corp. common stock $ 112,000
Equity in earnings of subsidiary $ 112,000
Cash 48,000
Investment in Shore Corp. common stock 48,000

In its Year 1 consolidated tax return, Bank should report dividend revenue of:
a. $48,000 b.$0 c.$9,600 d.$14,400

Explanation
Choice “b” is correct. In filing a consolidated federal income tax return, a corporate group eliminates the dividends from group members. Shore would have to be included in Bank's group consolidated income tax return because Bank owns 80% of Shore.

[JMG]

The way I remembered it was that it's a parent-subsidiary filing a consolidated tax return, so it's like a dividend was paid and received by the same reporting group entity. In other words, the dividend cancels itself out and is not reported.

[cpaMD86]

You have to eliminate parent/sub transactions [related party], which in this case is due to the ownership of 80%. Basically, you can't pay yourself. You'll see this in FAR. They paid $60,000 in dividends, so your share would have been $48,000 (60,000 * .8). In a consolidated return you'd only reference 20% of the dividend revenue since you own 80%. So, 48,000 * .2 = $9,600

FAR: 9/3

[HoosierCPA]

Becker skills practice for “Estate and Gift Transactions” is good stuff. The 2nd video, which is only 5 minutes, does a great job at breaking down what all goes into the estate. I thought I would share. I listened to it a couple times just to reinforce it.

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

[HoosierCPA]

Can someone explain to me the difference between the $5,450,000 estate credit and the $2,125,800 credit?

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

[Claudia408]

Hey guys, took REG yesterday. So different than my last attempt. Last attempt, MCQ almost seemed like I was taking the wrong test. SIMs were all major topics and I knew all of them. This time, MCQ was OK mostly as I expected. SIMs this time – totally UNFAIR. They weren't tough, but out of 5 non research, only 2 were on major topics. The other 2 were topics your review course mentioned in a paragraph so who would spend more than a few minutes studying for it, and the other one, I couldn't understand what they wanted! Needless to say, I'm only really confident on the research. So basically I regret studying and knowing property, gift and corporate like my life depended on it, bc it didn't. Last chance for me to pass in April.

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[HoosierCPA]

@claudia408 that sounds like my experience every time I walk into REG. The sims in my opinion should cover major topics but in my experience rarely ever do. I'm trying to make an educated guess based on my experience which little topics they are going to try and surprise me on. Estate always seems like a popular one so I've been spending a lot more time then I typically would studying it.

I hope you're wrong about the Sims and you did better then you think. The sim that you had no idea about very well could be a pre-test. Anyway, what's done is done..I'm pulling for you!

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

[RE2PECT]

@Claudia408- From what I've been reading, people are either getting fairly straightforward sims are ones similar to yours. If it helps at all, whoever else had the same sims as you are probably feeling the same way. Hopefully 1 one of those 2 sims you mentioned won't count and you did ok on the other 2.

@dtatham10- I found a couple sites that might help explain it better.

https://www.fool.com/retirement/general/2015/12/18/2016-estate-tax-rates.aspx

https://thismatter.com/money/tax/gift-estate-generation-skipping-tax-calculations.htm

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

[Claudia408]

dtatham1- thanks, i really hope so, but it just doesn't seem possible i could pass. and yes, i agree those nit picky topics should be limited to the MCQ only. those little topics don't even test what you know or if you studied sufficiently. total BS! well good luck on your next attempt! me, i'm gonna cry the rest of the day before i restart studying for FAR…

BEC - 75 (3x)
AUD - 78 (3x)
REG - 67, 66, Aug 1
FAR - 54, Sept 8

[celia]

@thebigguy1992

28,000 x 1/7 x 200% x (1.5/12)

2/7 means 1/7 x 200%

[HoosierCPA]

MACRS for property other then Real Property…use Half year or Mid Month and 200% double declining in year 1.

Real property uses straight line over 27.5 (residential property) 39 years (commercial property).

Many people use the MACRS tables for the mid quarter but if you use logic you can figure it out on your own…if you are calc'ing the mid quarter for property added int he final quarter is MID WAY through the final quarter so 3 months divided by 2 or 1.5. Same logic if you are doing mid quarter for an item placed into service in the first quarter then its MID WAY through the first quarter which is 1.5 months (same calculation as before) PLUS the 3 quarters remaining in the year so 10.5 (1.5 months first quarter + 9 months for 3 remaining quarters) months of depreciation need to be ran off.

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

[wakefern58]

Hey guys – When reconciling the M1, Is the Dividend Received Deduction deducted from GAAP Book Income? Becker has a simulation on it and i thought the dividend received deduction reduced GAAP income on the M1?

[HoosierCPA]

@wakefern58 I found a brief article that sums it up well. The DRD is taken as a “special deduction” on line 29. The schedule M1 reconciles to line 28 “taxable income before net operating loss deduction and SPECIAL DEDUCTIONS” of the 1120.

https://www.fulleredu.com/taxblog/should-dividends-received-deduction-amounts-be-included-on-schedule-m-1m-3/

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

[wakefern58]

@dtatham10 Appreciate this so much! That article summed it up perfectly. Saved me a lot of time as i sit here wondering why the DRD wasnt included haha Thanks!

[Author]

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