[jeff]

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

[HoosierCPA]

Hope studying is going well for everyone! The bad news is I have been sick all weekend. The good news is it's kept me from thinking about the score release Wednesday night! Pass/Fail I'm just trying to stay positive about this whole experience. Much easier said then done.

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

[isoceles]

@jack yassa: I bought the Wiley book, bought Ninja MCQs and notes. My strategy was to take the book and the notes and “improve” the notes by writing additional things down in the margins. I also kept a 1 subject notebook for each major category (individual, property, entity) where I would keep additional notes on problems that I would miss in the MCQ. My biggest piece of advice is to make sure you're spending the time to go back and do review problems from stuff you already studied. For example, when I did individual tax I would just concentrate on those MCQs. Then when I moved on to property transactions I didn't take the time to go back and keep individual tax fresh.

[QueenCPA]

Help Needed

Exam in less than a week

Why is the recognized gain zero here when there is boot of 3500

Please explain 🙂

A taxpayer is trading in an automobile used solely for business purposes for another automobile to be used in his business. The automobile originally cost $35,000 and he has taken $12,000 in depreciation. The old automobile is currently worth $20,000 and the new automobile the taxpayer wants in exchange is only worth $16,500. The other party agrees to give the taxpayer $3,500 in cash in addition to the new auto. What is the gain or loss recognized by the taxpayer on this transaction?
a. $3,000 loss
b. $0
c. $3,500 gain
d. $3,500 loss

Explanation
Calculations for “Recognized Loss with Boot Received (Of Cash)”

Gain/Loss Recognized:
Loss recognized
=
$0 (Realized loss is never recognized in like-kind exchanges.)

[cpaMD86]

16,500 (FMV of New Auto) + 3,500 (Boot Received) – 20,000 (Adj basis of Old Auto) = $0 Realized Gain

This is a like kind exchange. Your gain will be the lesser of your realized gain or boot received. Zero, of course, is less than $3500, so no gain would be recognized.

FAR: 9/3

[CPYay]

Hi all,

Been dormant from the forum doing literally hundreds of questions the past couple of days. This one has me confused:

Able and Baker are equal members in Apple, an LLC. Apple has elected not to be treated as a corporation. Able contributes $7,000 cash and Baker contributes a machine with a basis of $5,000 and a fair market value of $10,000, subject to a liability of $3,000. What is Apple's basis for the machine?

The answer is $5,000. Why is the liability not considered? I took notes from a previous question as follows:

Liabilities and effect on basis
Partnership: affects basis (increases basis)
S Corp: does not affect basis
LLC: decreases basis

Thoroughly confused now about when to include the liability and when not to.

[Accountingbeans]

Sorry if this has already been asked: When does the exam start testing 2017 tax rules? For example, I'm taking REG March 9. Is the personal exemption for exam purposes still $4,050 as it was for 2016? Thanks

Newbie
BEC- August 31

[CPYay]

@accountingbeans

The $4,050 exemption applies to your exam on March 9th. Continue to use the 2016 figures.

[scantu2011]

I am starting my journey to finally get this exam done. My first section is REG and Ive
taken it before a few years ago and just gave up. Now in it to finish, not giving up. So I have Just NINJA Review products, has anyone else just used Ninja products without any other supplements?

[jjjgolf500]

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 current-year's tax return for investment interest expenses?

A. 0
B. $5000
C. $2000
D. $3000

I can't wrap my head around why the answer is C ($2000). I thought the interest was deductible to the extent of net investment income?

Thanks!

[jack yassa]

@jjjgolf500

Inv interest is limited to the “NET”!

Inv Income VS Inv Exp
10K 8K

NET is 2k.

[jjjgolf500]

Thanks @Jack. So the unused 3K would be carried forward…

[CPA788]

Hey @cpyay – I think you are applying the rules to the basis of the partners, Able and Baker. Their bases would be affected by the liability. The basis to company/partnership formed doesn't follow that same rule set and will have a basis the same as the person who contributed it. Someday if they ever sell that property, the basis carried over from whatever it was in the individuals hands. Does that help?

BEC - 74, 77
FAR - 72, 71 (retake 7/29)
REG - 69
AUD - Q4 '16

CA Candidate

[thebigguy1992]

Participating Preferred Stock gives
shareholders right to dividends in addition
to what they get as Preferred Stockholders

can anyone explain what participating adds to a preferred stockholders rights? i thought their main right was that they got first dividends over Common Stockholders, but they couldn't vote.

[jjjgolf500]

How long does a creditor have to file a financing statement to perfect a security agreement? I thought it was 20 days but I have also seen 10…

Thanks

[QueenCPA]

@@isoceles

How were the sims you got?

Wondering the best way to prepare for sims.

[Author]

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