[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

[jstay]

@cpa8488- investment interest expense is an itemized deduction, limited to net taxable investment income (kind of like gambling winnings).

Taxable investment income: includes interest, dividends, rents, royalties, and net long-term/short-term gains

– don't include tax free interest

investment expense-includes investment advice fees (financial advisor, etc), safe deposit box, etc

so say we have 10,000 in investment income and 15,000 in investment expenses..we can only deduct 10,000 of those expenses (so long as its above 2% AGI). the 5,000 can be carried forward forever

[Anonymous]

Thanks jstay your going to kill reg!

[jstay]

ehhhh i had to look that one up to get the specifics but idk im wondering if im actually studying enough

[Anonymous]

Investment expense also includes interest on money you borrowed to make an investment. This expense is not a subject to 2% floor, safe deposit box is

[hunter32]

Investment interest expense is netted against pretty much anything besides qualified residence interest.

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

[Tncincy]

Starting my week end marathon…..8 hrs today is my goal. I don't know how many mcq's that is but here we go…..

Edit: was in this same place a year ago…restarting power weekend. I need to pass at least one part ( or die trying)

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

[Anonymous]

Gary Berg, a farmer, exchanges a tractor with a basis of $40,000 and a value of $50,000 for a tractor with a value of $44,000 plus $6,000 cash. The basis of the tractor acquired by Gary is:

A.

$40,000.

B.

$44,000.

Incorrect C.

$46,000.

D.

$50,000.

I hate like-kind exchanges. Can someone explain the above problem? Also, how do you keep like-kind exchanges straight? I always get them wrong. I don't even understand them!

[Anonymous]

if the answer is A i can try

[Tncincy]

I don't think this is a like kind exchange when cash is involved.

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

[jstay]

Correct me if im wrong: the mom and pop exclusion is 25,000 from ordinary income if a person materially participates in it.

the section 1244 stock is a deduction of up to 50,000 from ordinary income, must be original owners

[Ai]

Hey guys

Saw this question on NINGA MCQs I don't understand why we deduct the passive activity loss.

In the current year, a taxpayer reports the following items:

Salary $50,000

Income from Partnership A, in which the

taxpayer materially participates 20,000

Passive activity loss from Partnership B (40,000)

During the year, the taxpayer disposed of the interest in Partnership B, which had a suspended loss carryover of $10,000 from prior years. What is the taxpayer's adjusted gross income for the current year?

I said it was $70,000 but the answer is $20,00. Any help in explaining why would be great! thanks 🙂

AUD (x3)81 (expires SEPT 2015)
BEC (x2) 81 (Lost Credit in March), Retake- 79
REG (x5) 76
FAR (x1) 62 Retake August 2015

[willpassby2014]

WAS SEARCHING FOR THIS RESEARCH QUESTION FOR 20 MINUTES LOL WITH NO LUCK

Mrs. Vick is considering making contributions to a qualified tuition program to provide savings for her daughter's college education. However, Mrs. Vick is concerned that the contributions will be considered a gift of a future interest and result in a taxable gift. Which code section and subsection provide the gift tax treatment for contributions to a qualified tuition program?

Enter your response in the answer fields below. Guidance on correctly structuring your response appears above and below the answer fields.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[jstay]

@akamara, when he sells the partnership that is a passive activity, any passive losses can be deducted against ordinary income. thus the 40,000 and suspended 10,000 are deductible against the 70,000

[Anonymous]

willpassby2014,

I think it has to do with 529 plan, you can contribute like 70000 in a first year which is 14000 gift exclusion * 5 years or something. Also couldn't find much

edit: is it here? https://www.law.cornell.edu/uscode/text/26/529

[willpassby2014]

your are right 529 (c). I was searching under Gift tax area.

BEC Passed
FAR Passed
AUD Passed
REG Passed

[Author]

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