[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]

jstay don't worry about the actual percentage. And you had to rush and do the whole thing over!! just relax. Review the exam and take a few hours break. You will be fine you know your shit

[jstay]

i hope…and has anyone else taken the practice test for becker? i think there is a mistake in one of the sims?

[Anonymous]

you should be able to view the answers and explanation. Post the mistake here if you can. Also, check out the thread “post your becker exam score vs. exam score”.

[jstay]

its a partnership sim with 3 partners, each contribute something

Gary = cash for 50,000 – 50% ownership – basis in cash is 50

Fred = inventory 20,000 – 30% ownership – basis in inventory is 20 FMV = 50

Herman = land 25,000 – 20% – basis is 25,000 FMV of 25,000

This is where it gets tricky (i think they made a mistake) – it says FRED held the land as capital asset and was subject to 15,000 mortgage..well FRED DIDNT CONTRIBUTE THE LAND….it was herman. so i assumed they meant herman

Basis for Gary = 50,000 + 7,500

basis for Fred = 24,500

basis for herman = 13,000

BECKER had this as the answer

Gary = 57,500

Fred = 9,500

Herman = 28,000

They took the numbers and kind of mixed them up. When recalculating my score, should i count that as 100% correct because i believe i was had they used the correct numbers…and even if it was fred with the land i could have figured it out

Thoughts?

its the first sim in the second practice exam

[jstay]

wow and on the second sim i filled in 0s for the blank spaces and it marked them all wrong…i would have also gotten 100 on that sim as well. it literally marked 6 out of 14 wrong. should i recalculate this one as well?

[Anonymous]

ErikaG28,

That's how I felt too. I don't know what R1, but I spent longest getting through Roger's 1 chapter on individual taxation.

I ended up downloading 1040 in excel and just adding columns on a right with notes on every line. It's was still really hard to systematize

[Anonymous]

jstay, doesn't make sense to me. Even if they meant Herman, his basis would have been 25000-15000+5000

[jstay]

with my corrected (updated scores) i would have gotten a 73, i like seeing that better then a 66. but in all honesty i feel i did get those questions right

[jstay]

@anjanja, well hes a 20% owner not 1/3 so he doesnt add the full 5,000 just 20% of 15,000

[Anonymous]

yeah, basis – mortgage + 20% of mortgage

I think both Fred and Herman contributed land, then I understand the answer given

[Anonymous]

Fred- 20000-15000+33%(15000)=9500

or they meant to say Fred was holding inventory as capital asset subject to 15000 debt

[jstay]

basis – mortgage + 20% of mortgage would be 13,000, i thought?

25,000 – 15,000 + 3,000 = 13,000

but how can Fred contribute land when it specifically says inventory, which can't be a capital asset!

[jstay]

i get the calculations and everything but i just dont get how they can come up with Fred as the one with the land when herman had the land and Fred had inventory. either way if the question was a bit more clear i would have gotten 100% it really wasnt that hard but they have to make ti 100x more difficult

[Anonymous]

right, 3000, not 5000

there is obviously a typo or something. Herman must have contributed inventory and Fred contr the land. Then it all adds up

[jstay]

right! if herman would contribute the inventory and fred the land, i get it and would need to calculate it in the same way just switched around. Either way the question was unclear and i feel bad marking it right when becker marked it wrong

[Author]

Replies