[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]

Hi,

I am confused about this topic:

Health & Accident insurance. Is my understanding of the three points below correct?

=> Premiums paid by EMPLOYER are excluded from gross income. However, amounts paid to an employee under the policy are included (exception: if amounts are reimbursement of medical expenses or compensation for permanent loss of body function).

=> If it is an S-Corp and you own 2% or more of the company, then premiums paid by the EMPLOYER are included in gross income.

=> Premiums paid by an EMPLOYEE are deductible as an itemized deduction (under medical expenses) as long as you have not claimed a tax benefit out of it (should not be paid out of a pre-tax plan through payroll reductions etc.

[Anonymous]

1. what does it mean “amounts paid to an employee under the policy are included”?

3. yeah, you can't itemize pre-tax premiums, it's already excluded

[vritti]

Thanks @anjanja 🙂

1) I mean any amounts paid by the insurance company to the employee as part of the plan are included unless they are reimbursements for some medical expense etc.

Can someone please explain hobby loss rules to me? I dont understand the three categories of deductions. Came across a SIM on this in NINJA . Thank you 🙂

[Tncincy]

anybody dealing with foreign income taxes or income? I find it interesting because my son is invited to play basketball

overseas and I am sure if he stay I will be asked a ton of questions by him and his teammates. Maybe this could be an extension of my tax business. ( foreign tax consulting)

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

[Anonymous]

Jefferson Hardware ordered 300 Ram hammers from Ajax Hardware. Ajax accepted the order in writing. On the final date allowed for delivery, Ajax discovered it did not have enough Ram hammers to fill the order. Instead, Ajax sent 300 Strong hammers. Ajax stated on the invoice that the shipment was sent only as an accommodation. Which of the following statements is correct?

A.

Ajax’s note of accommodation cancels the contract between Jefferson and Ajax.

B.

Jefferson’s order can only be accepted by Ajax’s shipment of the goods ordered.

Correct C.

Ajax’s shipment of Strong hammers is a breach of contract.

Incorrect D.

Ajax’s shipment of Strong hammers is a counteroffer and no contract exists between Jefferson and Ajax.

According to Becker r6-29 an exception exists called notice of accommodation.

Edit: I just read the pass key lol how tricky!!! This exception only applies when shipment is used as a means of acceptance. If a party already accepts an order by promising to ship then they discover they don't have the correct goods and ship “as accommodation” it's breach.

[Anonymous]

Does anybody know if I should study the credits, tax laws etc. that have expired prior to 2014? I assume this information will not be tested but would like to confirm if someone knows?

[jstay]

@cpa8488 that was tricky but thanks for explaining it!

[Anonymous]

@jstay can you answer this question: For a general partnership if one partner quits is the GP automatically terminated?

[Anonymous]

cpa8488, no, it isn't

[jstay]

This was my first response:

I think it would depend on the amount of partners in the partnership, if its two people only then i would think yes. However if there is more then two then i think it can continue on (i remember i had a question of some sort, then it struck me) so i thought it isnt automatically terminated (unless of course it was more then that certain percantage about hands changing ownership, is it 66%??) — then it would be

After thinking about the question i had:

i believe the answer said something that the partnership is automatically terminated and a new partnership would be formed.

Ahhhh, i think i would go with my second intuition and say it is automatically terminated and a new partnership is formed

(im gonna look this up later)

[jstay]

Ivor and Associates, CPAs, audited the financial statements of Jaymo Corp. As a result of Ivor's negligence in conducting the audit, the financial statements included material misstatements. Ivor was unaware of this fact. The financial statements and Ivor's unqualified opinion were included in a registration statement and prospectus for an original public offering of stock by Jaymo. Thorp purchased shares in the offering. Thorp received a copy of the prospectus prior to the purchase but did not read it. The shares declined in value as a result of the misstatements in Jaymo's financial statements becoming known. Under which of the following Acts is Thorp most likely to prevail in a lawsuit against Ivor?

A.

Securities Act of 1933 (Section 11)

B.

Securities Exchange Act of 1934 (Section 10(b), Rule 10b-5)

C.

Both the Securities Act of 1933 (Section 11) and the Securities Exchange Act of 1934 (Section 109(b), Rule 10b-5)

D.

Neither the Securities Act of 1933 nor the Securities Exchange Act of 1934

[Sandia]

@CPA8488 – YES automatically terminated

@JSTAY A

FAR - 77 x2 Wiley book & no test bank
AUD - 83 x3 NINJA Test bank 3 time
REG - 80 x1 NINJA Test bank
BEC - 78 X2 NINJA Test bank ..done!!promesa cumplida mama -que llege al cielo 🙂
Ethic 100% Licensed VA CPA

[jstay]

Sandia, correct! and sweet i was kind of right with that explanation lol thanks

[jstay]

and that ownership % limit of “changing hands” in a partnership is 66%?

[Anonymous]

what are you guys talking about

https://www.law.cornell.edu/uscode/text/26/708

[Author]

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