[jeff]

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

[HoosierCPA]

@wake no problem! Off the top of my head I was thinking the same as you till I did some googling! So thank you for posting that question! lol

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

[RE2PECT]

Anybody using Wiley CPAexcel test bank? My ninja subscription expired today and Wiley's having a 25% off sale. I still have Gleim and Roger to fall back on, but could always use more sim practice lol.

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

[Claudia408]

Re2pect – I used Wiley test bank and it has good queeions and sims but explantions could be better. But hey it's new material.

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

[wakefern58]

Appreciate the help dtatham10!

Question about C Corps:

Assume Mitchell contributed an asset to a C Corp when forming with a FMV of 80,000, a basis of 40,000 and liabilities of 50,000. He also contributed cash of 20,000 and received NO cash from the C Corp. What is Mitchell's basis in the stock?

Im getting Mitch's basis in the stock as the following- Cash contributed of 20,000. Property contributed of 40,000 – liabilities of 50,000 = -10,000. Im not sure where to go from here as i know basis cannot be below zero.

[HoosierCPA]

@wake I'm answering this from my phone and not by study material but I believe the trick here is since the corp assumed liabilities greater then the basis the shareholders basis is the liabilities assumed. It's either that or they have a 10k gain (for the liabilities assumed over basis). Either way it brings you to a 50k basis in the property. You may want to double check to see exactly how it's handled but that should be the jist of it.

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

[jeff]

Video: REG Partnership Tax K-1 Deductions

Video: REG Partnership Tax K-1 Deductions

[wakefern58]

In the formation of a C Corp, the C Corp's basis is the greater of the NBV + any gain recognized or the debt assumed by the corporation.

1)Does the “Plus any gain recognized” consist of BOTH cash received and the gain realized from cancellation of debt?

2) When the debt is assumed by the corp, the debt must exceed BOTH property contributed and the cash contributed correct?

Then the greater of these two is the C Corp's basis. Is this correct? Cant thank you enough for the help.

[Anonymous]

Hello guys,

I am taking these three exams (BEC,FAR,REG) together with a gap of 3 days among them before March 2017.

I need suggestion on my preparation. I have gone through Becker's notes on REG, FAR, and BEC. I have also done MCQ of FAR and REG. Now practicing Simulations.
I need suggestion on what should I focus on in this month, which can help me both review and prepare appropriately for the big challenge.

Thanks

[Anonymous]

@JEG what is AL?

[HoosierCPA]

@wake yeah that's how I understand it, if the liabilities assumed is greater then the basis then the liabilities assumed becomes the basis. In your example I would say the ending basis is 50k (liabilities assumed > then basis so the liabilities becomes the basis) + 20k cash contributed – 50k (liabilities assumed by corp) = ending basis 20k. Is that correct?

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

[celia]

@NWOWOLFPAK

Yes, I noticed tax due date has been changed.
Filing 2016 tax returns, Partnership tax due is March 15 and C corporation tax due due is April 15.
S corporation is same as March 15.

Even though, I will taking Q1, I will keeping mind old and new due dates.

[HoosierCPA]

Which of the following activities regularly conducted by a taxexempt organization will result in unrelated business income?

I. Selling articles made by disabled persons as part of their rehabilitation, when the organization is involved exclusively in their rehabilitation.
II. Operating a grocery store almost fully staffed by emotionally disabled persons as part of a therapeutic program.

A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.

Explanation
Rule: Unrelated business taxable income must be derived from an activity that constitutes a trade or business that is regularly carried on and is not substantially related to the organization's taxexempt purpose. Both of the above options appear to be substantially related to the organization's taxexempt purpose and, therefore, are not taxable.

**This question has always killed me. I just don't understand how its related business income–I'm not sure there is a great way anyone can explain it to me but selling cloths does not seem related to rehab nor does selling groceries seem like it relates to therapy.

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

[cpaMD86]

@dtatham10

The answer makes sense to me because in both examples they aren't deviating from their purpose. They strictly make and sell articles for the benefit of the organization, and they operate the grocery for the benefit of their overall program. They aren't activities – it is their core. In reality it might not seem feasible, but for purposes of the question their sticking to it…

On another note, do you think the Ninja MCQ are more difficult then what actually appears on the exam? I felt this way for FAR. Only reason I ask is because I am getting beat up with the MCQs right now. I am averaging and trending in the 60%s …just doing new questions right now. So I expect an upward trend on the second run.

FAR: 9/3

[jack yassa]

Folks, this question is really frustrating me! though i read the answer i can't get it!!
Can you please simplify it for me.
Question CPA-07181
An individual taxpayer earned $10,000 in investment income, $8,000 in
noninterest investment expenses, and $5,000 in investment interest
expense. How much is the taxpayer allowed to deduct on the currentyear's
tax return for investment interest expenses?
a. $0
b. $2,000
c. $3,000
d. $5,000
Explanation
Choice “b” is correct. The deduction for investment interest expenses is
limited to net taxable investment income which is defined as taxable
investment income minus all related investment expenses (other than
investment interest expense). If the investment expense is an itemized
deduction, then only those expenses exceeding 2% of AGI are
considered.
Taxable investment income includes: (i) interest and dividends (if taxed
at ordinary income tax rates), (ii) rents (if the activity is not a passive
activity), (iii) royalties (in excess of related expenses), (iv) net shortterm
capital gains, and (v) net long-term capital gains if the taxpayer
elects not to claim the net capital gains reduced tax rate.
Calculation:
Investment income
10,000
Less: Related investment expenses other than investment
interest expenses
(8,000)
Net investment income
Becker Professional Education Registered to: Kathy Chuang
© DeVry/Becker Educational Development Corp. All rights reserved
$
The taxpayer's deduction for investment interest expense is $2,020,00:0 t0he
lesser of (i) $2,000 net investment income or (ii) $5,000 investment
interest expense.
Choices “a”, “c”, and “d” are incorrect per the above rule and per the
above computations.

[HoosierCPA]

@cpamd thanks for the explanation, that helps.

I felt the ninja MCQ's are pretty in line with the exam. Becker same way. I've never used Roger so I can't speak on that. One thing I will say is REG mcq's are short and to the point. If you get long winded questions tell yourself more then likely you aren't going to see that on the exam. I've always thought the REG exam has the most straight forward MCQ's…they aren't super tricky. But man, the SIMS, in my opinion there is no other exam that compares to them. They are absolutely brutal.

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

[Author]

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