[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]

I don't understand why doesn't computer game count. Is it because only 1 gift/year is deductible? It doesn't say if it was a son of one of the champagne recipients, is it obvious?

On New Year’s Eve, Hal sent three bottles of champagne to the three owners of the Day & Night Cleaners to thank them for their business during the year. Each bottle of champagne cost $75. Each of the owners took the champagne home. Earlier in the year, Hal had given a video game to the son of one of the owners. The value of the game was $50. To show his appreciation to another customer for his business, Hal took the customer to a football game. The value of the tickets was $100. What is the total amount Hal can deduct as business gifts?

A. $100

B. $125

C. $75

Answer (C) is correct.

Expenditures for business gifts are deductible. The deduction is limited to $25 per recipient per year. Hal may deduct $75 ($25 × 3 recipients) for business gifts. The ticket would be entertainment since he took the customer to the game. Only $50 would be deductible as entertainment. If it were a gift, the limit would be $25. It can be classified as a gift if you did not accompany the customer. The gift to the son of the owner is considered given to the owner.

D. $375

[princeCPA]

Anjanja–I think it is bacuase business related gift

BEC 79
FAR 86
AUD 79
REG 90

[jstay]

@anjanja, it says the three owners and it says the owners son so i guess we have to assume it. but thanks for the question, i didnt know if he accompanies him it isnt a gift its travel and entertainment. he cant accompany him for it to be a gift..interesting

[Anonymous]

Right, this is a business gift, but computer game is also a business gift. We just have to assume that his father got a champagne already

Jstay, those are so easy to forget, I just can't stand it

[Tncincy]

Hope all ninja's are well today and ready for more quizzing and studying. Will be an all dayer for me…..determined to pass. I looked at some of the other topics and seems like score release is building up. I'm not waiting on a score, but I can tell this is the end for some…..one way or another. But I hope it's pass for all.

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

[Anonymous]

Its a beautiful day here in the big apple and what better way to take in the outdoor weather than being inside with property and partnership taxation….SPF 75!!!

[jstay]

@CPAstateofmind, long island here and yeah it is BEAUTIFUL out, this sucks lol

already did 160 questions today so far, bout to do another 30

[Anonymous]

there are so many ticks I don't even want to go outside. So much for the backyard

[Anonymous]

I mowed the yard today. All the while worrying about my score… 3 more days…

[Anonymous]

I live in the mitten and its seriously like 75 degrees outside and the last thing I want to do is sit in my cold basement with 2 little windows and study!! But if I fail and have to sit down here in June and July it isn't going to be pretty for the people around me. Besides all the idiots are out driving now!!

[princeCPA]

On their joint tax return, Sam and Joann had adjusted gross income (AGI) of $150,000 and claimed the following itemized deductions:

Interest of $15,000 on a $100,000 home equity loan to purchase a motor home

Real estate tax and state income taxes of $18,000

Unreimbursed medical expenses of $15,000 (prior to AGI limitation)

Miscellaneous itemized deductions of $5,000 (prior to AGI limitation)

Based on these deductions, what would be the amount of AMT add-back adjustment in computing alternative minimum taxable income?

BEC 79
FAR 86
AUD 79
REG 90

[Anonymous]

So a friend asked me this question earlier and I didn't really know the answer. He paid for a January 2015 class in December of 2014. He said he never got the paper from the school I believe its a 1089 or whatever. So he didn't include the amount in taxes this year. He doesn't have his bachelor's so I know he qualifies for school credits which could raise his refund amount.What should he do?

[Anonymous]

um… 150000? could it be right?

I mean is AMTI 150?

[Ai]

@princeCPA 0?

1) not allowed unless for home improvement

2) Not allowed

3) 0. AGI limitation is $15,000 (150,000*10%)

4) Not allowed.

Wait so would I add them back in, if they aren't allowed then?

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

[jstay]

yes you would add them back in, is the answer 50,000? or 53,000?

[Author]

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