[jeff]

Welcome to the Q2 2015 CPA Exam Study Group for REG.

“Death and Taxes” – Individual Tax for the CPA Exam

Posted by Another71 on Monday, November 24, 2014

Free NINJA: https://www.another71.com/cpa-exam-study-plan/

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

[Anonymous]

his wife Rita probably is the other 4,000

[vritti]

@cpa8488

Thank you for the reply, however the question only says “John contributes $4000 to an IRA for himself.” Are we allowed to assume that Rita does too?

[Anonymous]

“Rita Spano is an active participant in a company retirement plan.” I guess the assumption is she contributed 4,000 as well to her company retirement plan.

[jstay]

Tom Lewis, a single taxpayer, received a stock dividend in 2014 from ABC Corp. He had the option to receive either cash or ABC stock with a fair market value of $1,000 as of the date of distribution. The par value of the stock on the date of distribution was $600. Tom must include what amount in gross income for 2014 as a result of the stock dividend?

A.

$0

B.

$400

C.

$600

D.

$1,000

i got this one wrong

[Anonymous]

if your given the option to receive cash or stock you must include the FMV of the stock in your gross income. EVEN IF you didn't accept it. Just the fact that the option was provided makes it included in gross income always at FMV!

[Anonymous]

When Susan Jones graduated from college, she received a gold bracelet from her favorite aunt. Aunt Bess had spent $350 on the bracelet. When Susan died, her daughter Grace received the bracelet as provided in her will. At that time the gold price had risen and the value of the bracelet was $2,200. If Grace sells the bracelet for $2,350, what is her recognized gain?

A.

$2,350

B.

$2,200

Incorrect C.

$2,000

D.

$150

I always forget that inherited property is FMV not at basis!!

[hunter32]

Quick question regarding like-kind exchanges. Why is it that when you receive cash and also pay cash that you don't net the two to determine the recognized gain?

BEC - 80 (Becker)
AUD - 92 (Becker+NINJA MCQ)
FAR - 87 (Becker+NINJA MCQ)
REG - 90 (Becker+NINJA MCQ and Audio)

[Anonymous]

Gene and Olive Olson are married and file a joint return in 2014. The Olsons are both active participants in qualified retirement plans. The Olsons have adjusted gross income of $106,000 for 2014 and each contributed $5,500 to a traditional IRA. What is the deduction for IRA contributions for the Olsons in 2014?

A.

$0

B.

$5,000

C.

$5,500

Incorrect D.

$11,000

here's another one for you @vritti. These suck!!

In 2014, the phaseout of the IRA deduction for married taxpayers participating in another pension plan filing jointly exists for AGI between $96,000 and $116,000. Since their AGI is halfway between $96,000 and $116,000, only half of the $11,000 is deductible. Answer C!

[Anonymous]

cpa8488,

Roger said you can't ask a dead person about how much they paid for something so you use FMV

[Anonymous]

Hunter,

you will probably just net cash paid and received?

[Anonymous]

Can someone please help me wrap my head around this qn from Gleim:

Robert Francis O’Connor, a single taxpayer age 30, had adjusted gross income of $23,000 in 2014. Upon examining his records, he listed the following deductions for the year:

Medical expenses

$3,000

Charitable contributions

2,300

State income taxes paid

1,160

Business expenses reimbursed by

employer but not substantiated

1,500

The answer is $5,200.

I thought charitable donation is limited to 50% of AGI. It looks like the answers is taking the whole $2,300.

Thanks

[Anonymous]

What is the question asking? 50% of AGI is 11,500 he is under that so you take the whole amount. I think your question maybe missing the stem of the question….

[Anonymous]

Sorry @cpa8488 …here's the question:

The amount of his allowable itemized deductions for 2014 is

[Anonymous]

Business expenses reimbursed by employer but not substantiated – is that added to income and subtracted as itemized deduction?

And if substantiated?

[Anonymous]

@anjanja…Yes, they are added to income and subtracted as itemized deductions subject to the 2% AGI floor.

If substantiated-they are excluded from income

[Author]

Replies