[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]

Can someone explain the differences between exoneration, subrogation and reimbursement in English?

[jstay]

@CPA8488

subrogation – right by which the surety succeeds the creditors rights (i.e the surety pays off the debt and then gets the rights the creditor had to go after principal debtor)

contribution – right of a co-surety, after payment, to demand a pro-rata share payment form other co-sureties.

exoneration – right of a curety PRIOR to payment to get a court order demanding the debtor pay

im not sure on reimbursement, if i had to guess it would be the right of the surety for reimbursement from principal

[willpassby2014]

WOW- I NEVER THOUGHT ABOUT THIS TRICK.

Dahl Corp. was organized and commenced operations in Year 0. At December 31, Year 5, Dahl had accumulated earnings and profits of $9,000 before dividend declaration and distribution. On Decem­ber 31, Year 5, Dahl distributed cash of $9,000 and a vacant parcel of land to Green, Dahl’s only stockholder. At the date of distribution, the land had a basis of $5,000 and a fair market value of $40,000. What was Green’s taxable dividend income in Year 5 from these distributions?

A.

$9,000

B.

$14,000

C.

$44,000

D.

$49,000

BEC Passed
FAR Passed
AUD Passed
REG Passed

[jstay]

is it A?

heres a good one

On January 2, Year 1, Shaw Corp., an accrual-basis, calendar-year C corporation, purchased all the assets of a sole proprietorship, including $300,000 in goodwill. Federal income tax expense of $110,100 and $7,500 for impairment of goodwill were deducted to arrive at Shaw’s reported book income of $239,200. What should be the amount of Shaw’s Year 1 taxable income, as reconciled on Shaw’s Schedule M-1 of Form 1120, U.S. Corporation Income Tax Return?

A.

$239,200

B.

$329,300

C.

$336,800

D.

$349,300

[willpassby2014]

its actually C. I also answered A. They are adding the gain on sale .

BEC Passed
FAR Passed
AUD Passed
REG Passed

[hunter32]

It's C…

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

[hunter32]

Do you guys do the practice exams for NINJA? The SIMS appear to be my enemy but ive been getting above 75. Hopefully that means I'm good to go for Friday.

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

[willpassby2014]

J stay- I know i have to add Fed ex to the book income and compute the correct GW Amortization. If its 15 years it should be 300,000/15=20000. So answer is C. Is that right

BEC Passed
FAR Passed
AUD Passed
REG Passed

[hunter32]

Yes, temporary difference of 12,500 (20,000 tax vs 7,500 book)

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

[Anonymous]

I never do practice exam. Started few times, but couldn't handle. What's the point of it anyway

[jstay]

140 questions into ninja. Average is 77 trending is 67 =/

[hunter32]

That's how I started too. My average is 85 now.

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

[Anonymous]

Another question. For a general partnership if one partner quits is the GP automatically terminated?

[Anonymous]

Bond and Spear orally agreed that Bond would buy a car from Spear for $475. Bond paid Spear a $100 deposit. The next day, Spear received an offer of $575, the car's fair market value. Spear immediately notified Bond that Spear would not sell the car to Bond and returned Bond's $100. If Bond sues Spear and Spear defends on the basis of the statute of frauds, Bond will probably:

A.

lose, because the agreement was for less than the fair market value of the car.

Correct B.

win, because the agreement was for less than $500.

C.

lose, because the agreement was not in writing and signed by Spear.

Incorrect D.

win, because Bond paid a deposit.

But bond paid $100 so he “bought time” what am I missing?!!

[vritti]

Hello @cpa8488,

This is the reason although this is a very confusing and vague question, this is the reason why it is B.

1) In the question, it says that Bond and Spear orally AGREED that he would buy a car for spear for 475$. Contract has been formed between them already regardless of whether the 100$ was paid.

2) Option contract (where promisor promises to keep an OFFER open in exchange for consideration) does not apply here. Why? Because a contract has already been formed.

3) According to statute of frauds, certain contracts need to be in writing in order to be enforceable. Sale of GOODS contracts above $500 need to be in writing to be enforceable. However in this case, oral contract is fine because it is only $475 .

The question essentially tests whether we are aware of the rule regarding oral contracts of sale of goods under $500 being a valid contract.

Sorry if my explanation is bad. Let me know if you understand 🙂

[Author]

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