[jeff]

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

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

[LIZZ]

I dont remember that part either @dtatham10 I am going to check my becker books when i get home. Is that Chapter 3 Business Combos?

What you said was:


@jmg ok can you or anyone elaborate on your comment. The example problem @re2pect posted makes me think you can take the full DRD even if it reduces your income to a loss.

“you’re thinking of the exception to the taxable income limitation rule for DRD if it results in a NOL.”

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[LIZZ]

NEVERMIND…. Geez I can post my question/comment without someone posting the answer !!!!

GREAT STUDY GROUP !

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[jack yassa]

Hello Guys,

Does the State income tax added back to the AMT or not?
In Becker R2-51 example add it back while in CPA-05537 didn't ad it back. I'm confused.

Please help.

[Namstut]

OH MY GOSH…Chapter 5 Becker – Federal, Legislative and Judicial Processes is killing me! It just does not settle in my brain! Just had to vent… 9 days before REG.

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

[Teal]

@dtatham west coast 🙂

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

[Namstut]

@Gak Yasa if you have a taxable state tax refund on your regular tax return, you have to exclude it from your income for AMT since you are not allowed to take a deduction for paid state taxes for AMT.

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

[Namstut]

@JMG and @dtatham10

A simplified example:

1. Multiply dividends received by deduction percentage
2. Multiply taxable income by deduction percentage
3. Subtract #1 from taxable income:
–If entity has income before DRD but DRD created NOL then use #1 is DRD
–If DRD does not create NOL then deduction is the lesser of #1 or #2.

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

[LIZZ]

Help…..
An individual is a 50% partner who materially participates in Stone Partnership. The individual’s adjusted basis at the beginning of the year was $0. Stone had a $70,000 loss from its business. Stone borrowed $30,000 from a bank of which $20,000 remained unpaid at year end. What amount of loss is the individual allowed in the current year from Stone?

ANSWER – 10,000

I know i have answered a question like this before but i forgot the logic behind it.

I dont know why I decided to look at the AICPA released questions. I hear they are worthless because they have been removed from the exam and you cant learn from them because you only have the letter answer.

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[Namstut]

@financelady the partner's basis are increased by the partner's proportionate share of the liabilities and the losses can be taken only to the extent of the partner's basis in the partnership. So the partner can take $10,000 of losses against his $10,000 basis (50% of the outstanding loan).

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

[LIZZ]

Ohh I got it. The partner share of liabilities increased by 10K which is 50% of the 20k liabilities outstanding. The loss is limited to bases so of the 70k loss the partner can only take 10k. I know I know…exactly what you said but in my own words.

THANKS

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[RE2PECT]

Does anyone have a good way to remember the meanings of joint tenants with right of survivorship, tenancy in common, etc.? I always get tripped up when a question asks about them.

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

[LIZZ]

Here are the notes I have. No memory trick here – sorry

Property Co-Ownership
Tenants in common
• No right of survivorship
• May have unequal ownership interests
Joint tenancy
• Right of survivorship
• Ownership interests must be identical
Easements are

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[LIZZ]

Again, I hate that I looked at the AICPA questions. need help understanding this question.

I thought it was about Wash Sales but I don't understand how they got the answer. All my notes say about wash sales is to ignore loss.

THE QUESTION:

11.
On year 1, Janice had the following transactions in Jacky, Inc. common stock:
DATE (Purch/Sale)– Shares /Price

Jan. 01 – (Purchase) — 500/$25
May 12 – (Sale)– 500/23
May 28 – (Purchase)– 250/$25
Oct 15 – (Sale)– 100/$18
What is Janice's deductible capital loss?
$400
$700
$1,100 – Correct Answer
$1,400

FAR - 05/2015
AUD - 75,11/2014
REG - 07/2015
BEC - 09/2015

[aatoural]

You are correct finance lady. Wash sales loss is not allowed maybe what is tricking you is that they did not buy the entire 500 shares within 30 days. They only bought 250. So from the 1000 loss only 500 is dissalowed. The new shares basis needs to include the dissalowed loss. like this:

P 500 * 25
S 500 * 23

Loss of 1000

P 250 * 25
S 100 * 18

The basis of the new 250 shares is increased by the dissalowed loss: 500/250 = 2

25+ 2 = 27 (which to match AICPA answer the 250 should be 22 per share not 25 maybe its a typo)

therefore

P 250 * 24
S 100 * 18

Loss 600

Allowed first loss 500 + 600 second loss = 1,100

but if indeed the number of shares for teh second purchaes was 250 at 25 per share then it should have been D.

P 250 * (25 + 2)
S 100 * 18

Loss 500 allowed + 900 = 1400

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

[aatoural]

I don't know if you can follow what I wrote is a bit crazy to explain. here is in a different way.

Jan. 01 – (Purchase) — 500/$25 =
May 12 – (Sale)– 500/23

Loss = 500 * 2 = 1000 Dissallowed = 250 * 2 = 500

May 28 – (Purchase)– 250/$25
Oct 15 – (Sale)– 100/$18

Basis to new shares = purchased price + price per share of dissalowed loss

500/250 = 2 New basis = 25(22) + 2 = 27(24)

Second loss = 27(24) – 18 = 9(6)

total loss = 500 + 900(600) = 1400 (1100)

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

[Author]

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