[jeff]

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

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

[HoosierCPA]

There is a REG sim, one of the given info is “capital gain distribution of $3,000”

There are 2 plug fields one of which is long term capital gain and the other short term capital gain…turns out “capital gain distribution” is long term…I plugged it in short term. Becker's great explanation is “there are no short-term capital gains in the facts given”. So it's safe to say that doesn't clear things up at all. Are distribution of capital gains always treated as long term?

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

[HoosierCPA]

Oh to add to the misery of the sims I just took. The question clearly states “enter the appropriate values in the shaded fields” doesn't specify if they want expense items as negative and income items as positive values…so I decide negative values for expense items..looks like that was the wrong guess. 100% on the problem ended up being a 75%! If this is the dumb shi* I get docked for on the actual exam I would be pissed. Clearly it's the right answer, frustrating!

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

[Anonymous]

I would not put a negative sign unless it is specifically instructed.

[HoosierCPA]

@amor I'll keep that in mind. Missed about half a problem on another one, this time it was my fault. Said leave fields “blank” and I put zeros lol. I would not put it past me that I have bombed many sims because of these silly mistakes.

I have one last question: there is a fairly long winded sim. The jist of it is they are netting passive income items. The S Corp, Limited Partner in a partnership, and Rental income are all being netted. Anyway, the Rental Income + S Corp income total a gain of $7K. The Limited partner loss is $6K…my understanding of passive income is you can net passive loss up to the amount of passive income…which in this example I would say you could net the total loss to get an ending passive income of $1k

HOWEVER–that assumption was wrong. Becker is telling me you get a MAX passive loss deduction of $5k…for some reason I have never heard that rule..is this true??! Or is this some odd ball exception to the rule?

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

[cpaMD86]

Are Ninja and Roger SIMs useful?

FAR: 9/3

[jack yassa]

@dtatham10
Can you help me with this please!
Becker REG4-TESTLET3-Q3
22. Taxpayer sold land she owned for 4
years with a basis of $60,000 to her
brother for $40,000. The brother sold the
land for $25,000 6 months later.

What’s the basis and why?

[JMG]

@jack for related party transactions, basis to the purchasing relative = cost + disallowed loss. So 40K + 20K = 60K basis. The brother would then have a short term loss of 35K.

[jack yassa]

@JMG
That's how i thought at the beginning
The basis he used here is $40,000 !!

[HoosierCPA]

@jack @jmg basis depends on the sale. If they sold it 70k it would take on the 60k basis for a 10k gain. If they sell for lower then both the basis and purchase price then you take on the lower of the purchase price or related parties basis as YOUR basis. So in this case the lower of the 2 is the sale price and you take the smaller loss. Hope That makes sense. Trying to type this on my cell!

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

[RE2PECT]

@ cpaMD86- Roger has a few that are pretty tough. He also has some DRS that are good to practice. I don't like Ninja's sims since many of them have you filling out tax forms. You're most likely not getting a sim like that on the exam.

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

[jack yassa]

@dtatham10
More confused now,
So why in #21 the basis is 50?
Taxpayer sold land she owned for 4 years with a basis of 60 to her brother for 40.The brother sold the land for 50 6 months later.

[Tncincy]

Ok so I am trying to study for two this window, I have not taken BEC yet (studying) and have not received my nts yet for reg. What's the best approach? Should I just wait for April with Reg or go for it…I am so nervous. I don;t want to start a new post.

It begins with a 75
Been here too long as a cheerleader....ready to pass

[CPYay]

Hi all. Trying to understand this MCQ. I thought business-related deductions like this were only allowed if they helped you OBTAIN a job, not assist in one you already have…

Tom Lewis, an individual taxpayer and employee of ABC Corp. (where he works as a CPA), paid for subscriptions to various accounting journals in the current year. Select the appropriate tax treatment for the payment of these subscriptions.

A. Not deductible on Form 1040
B. Deductible in full on Schedule A—Itemized Deductions
C. Deductible on Schedule A—Itemized Deductions, subject to a threshold amount of 2% of adjusted gross income
D. Deductible on Schedule A—Itemized Deductions, subject to a limitation of 50% of adjusted gross income

Answer is C. I thought it was A.

[Anonymous]

ANSWER IS C: Deductible on Schedule A—Itemized Deductions, subject to a threshold amount of 2% of adjusted gross income

Itemized Deductions not subject to 2% floor:
1. Gambling losses
2. Federal estate tax paid on income in respect of a decedent
3. Foreign income tax paid by an individual to a foreign country or a U.S. possession

Itemized Deductions subject to 2% floor:
1. Unreimbursed Employee Expenses
2. Miscellaneous Deductions
3. Investment Interest Expense

Employee Expenses / Miscellaneous Itemized Deductions (2% AGI test)
• Deductible:
10 [oUTCHARGES]
O –
U – Uniforms
T – Tax Preparation Fees
C – Convenience Fees (Debit Card) to pay income tax
H – Home => Business Use of Home =>exclusive use/for the employer’s convenience
A – Agency => Employment Agency Fees => deductible for a new job in the same profession; not deductible for a first job or entirely new profession
R – Reimbursement => Unreimbursed Business Expenses
G – Gifts/Business Gifts => $25 per recipient per year
E – Educational Expenses => do not confuse with educational interest expense; those not deducted above AGI; to maintain or improve the skills; meet the express requirements of the individual’s employer for retention of this job
E – Expense of Investors => Safe deposit box and Investment advice
S – Subscriptions to professional journals

[CPYay]

Thanks for the fast reply Amor. I didn't know about that mnemonic! Good to have!

[Author]

Replies