[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

[vritti]

@ CPA2B2015

Medical Expenses : $ 3000

< 10% of AGI i.e

[vritti]

@ CPA2B2015

Medical Expenses : $ 3000

– 10% of AGI i.e 2300

= $ 700

Charitable Contributions : can be deducted in full because the contribution amount does not exceed 50% of AGI

Thus = $2300

State income tax : Can deduct in full, thus = $ 1160

Business expenses : This is a miscellaneous itemized deduction subject to 2% AGI. Thus,

$1500 – 2% AGI i.e 460

= 1040

Final deduction : 700 + 2300 + 1160 + 1040 = 5200

[Anonymous]

i learned that political lobbying and political activity are different things and political organization can be tax exempt, but tax exempt organization can't participate in political lobbying. I honestly can't see what's the difference. potayto, potahto

[Anonymous]

Thanks vritti…

[jstay]

Quick Quiz for you everyone!

what are the 3 requirements for a security attachment?

[Gabe]

@anj I remember learning that too and being so confused

@jstay I won't say a thing 🙂

CPA, CFE
CISA- Experience will be completed by August 2016

[Anonymous]

Really? What does it even mean?

What should be the main goal of tax planning?

A.

Maximizing the taxpayer's tax liability

Correct B.

Optimizing the taxpayer's after-tax result

C.

Optimizing the taxpayer's before-tax result

Incorrect D.

Minimizing the taxpayer's tax liability

[Anonymous]

@CPA2B2015 – Itemized Deductions

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 23000*.1(floor)=2300 3000-2300 = 700

Charitable contributions 2,300 2300 (all is deductible because less than 50% agi)

State income taxes paid 1,160 1160 (all is deductible)

Business expenses reimbursed by

employer but not substantiated 1,500 23000*.02(floor)=460 1500-460=1040

700+2300+1160+1040 =The answer is take the standard deduction 🙂

[Anonymous]

@anjanja – I remember this MCQ and yeah, I tripped up on that one, too. Turns out it means the goal is to make sure that our taxpayer does pay taxes, but in the most optimal manner. Sometimes it is better to pay a big tax upfront to take advantage of a tax break down the road when tax rates start going up. It is from a tax planning perspective. Don't let it screw with you. Optimal is the key word.

[jstay]

Pursuant to a plan of corporate reorganization adopted in July of Year 1, Gow exchanged 500 shares of Lad Corp. common stock that he had bought in January of Year 1 at a cost of $5,000 for 100 shares of Rook Corp. common stock having a fair market value of $6,000. Gow’s recognized gain on this exchange was:

A.

$1,000 long-term capital gain.

B.

$1,000 short-term capital gain.

C.

$1,000 ordinary income.

D.

$0.

[Anonymous]

when I see word reorganization I think of 0

[Anonymous]

First timer here and I'm using Becker in preparation for my first exam (REG) on 5/28. Any tips on the best approach while using Becker? I just wrapped up R1 and completed all HW, Sims etc. Is completing all assignments for a chapter considered best practice before moving on? Any help is appreciated. Thanks!

[jstay]

Correct Anna it was a tax free reorganization so D is correct

[hunter32]

Farming simulations have to be the dumbest thing ever…

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

[Anonymous]

what's title holding company?

[Author]

Replies